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We're all clutching at the few precious dollars we have in our hip pockets right now. Thanks to the cost of living crisis, expendable income is becoming less and less apparent, as we direct our money towards only the essentials.
Groceries, bills and other expenses are soaring, so what happens when an unexpected or costly need comes up while you're already struggling - such as the need for a new car?
Getting around without a vehicle - while not impossible - is certainly harder to do. Limited public transport and the issues that come with it makes commuting a hassle, which is why many people prefer to drive.
But buying a brand new car is out of the question for many families and individuals, which leaves them with the option of buying a used car. And with the help of used car loans, this is a realistic and affordable choice.
While 2022 saw record-high prices in the used car market, these are thankfully on their way down. The price spike in used cars was thanks to COVID. Since there was a shortage of new cars due to a lack of semiconductor chips, used car prices soared higher than ever.
Now, with prices reducing, there's never been a better time to consider purchasing your next vehicle. In today's economy, investing in a used car is not only a way to save money, but also a smart money choice for a number of reasons. Plus, with government schemes such as the discounted license renewal for safe drivers, investing in a vehicle doesn't have to be as expensive as it's made out to be.
Cars depreciate over time - but a new car's depreciation value is far worse than a used car's. The minute a new car rolls out the door of the dealership, its value drops significantly. And while it may be tempting to get a spick and span new car, this loses you quite a bit of money in the long run.
Used cars, on the other hand, have already depreciated in value (to the disappointment of someone else). This initial plunge in price is shouldered by the first owner, and for the subsequent buyer, this presents an affordable advantage.
It's often forgotten about, but investing in a used car can actually result in lower insurance costs. New cars tend to have higher premiums, since they cost more to replace if you end up in an accident. Since used cars have depreciated over time, as we mentioned, they often have a lower replacement cost.
So, you've got a set budget in mind for your upcoming car purchase. The only question is: used or new? Your brain is set on a practical, basic but new car, but your heart is set on that specific model you could never afford if you bought it brand new.
The good thing is, you may be able to afford it if you consider looking at used cars, instead. Because they're not brand-spanking new, you can most likely afford a better model than you were originally planning to buy.
Choosing a used car over a new one is not just an economical decision, but also a friendlier one for the environment. Manufacturing a new car consumes significant resources, including steel, rubber, glass, and plastic. By opting for a used car, one reduces the demand for new car production, thereby conserving these materials and the energy required to source and process them.
The production of new vehicles contributes to pollution and carbon emissions. A used car purchase avoids adding to this environmental burden.
On top of this, modern vehicles are built to last longer. Many used cars still have plenty of road-worthy years ahead, so keeping them in use prevents unnecessary waste. Prolonging the life cycle of cars means fewer vehicles ending up in junkyards and tips.
There's often a stereotype that comes to mind whenever people think of a used car: dingy, falling apart and extremely unreliable, prone to breaking down in the most inconvenient spots.
Despite what the movies may tell you, used cars can actually be very reliable vehicles. Of course, it depends on each car, but buyers have no difficulty finding a roadworthy secondhand car at an affordable price.
If you're ever unsure if a car is good enough for the road, you can always invest in a roadworthy test or get a mechanic to take a look at it.