Why should I Buy a Used Automobile?

How do I choose between a new or used vehicle? Having a reliable automobile is important to everyone who has to get to work, places to go and people to see. The automobile industry is overflowing with different types of automobiles - car, truck, van, and SUV. Each of these vehicles has many different options, colors, styles and accessories from which to choose. Most customers generally know what type of vehicle they would like to own and how they would like to have their vehicle equipped when they start shopping. The biggest decision customers have to make is whether or not to buy a new or used vehicle. 

I have faced this dilemma when purchasing my own vehicles. I imagine most people, including myself, would typically like to have a brand-new car if possible. The biggest problem each customer faces is being able to afford the higher cost and payments of the new vehicle. Customers have to decide if they would rather have the high-priced new vehicle which has full factory warranty and stretches their budget or gamble on maybe buying someone else's junk to save a lot of money by purchasing a used car.

Each customer has plenty of good reasons to buy a new vehicle even though the price is higher. One is the secure feeling a brand-new car gives the customer by knowing the automobile has not been abused by some unknown owner. Starting out with a vehicle with no scratches, dings or any broken items is another good reason for buying a new. The new vehicle also comes with bumper-to-bumper warranty coverage and if there are any problems the factory has to fix it. Customers like to be able to just enjoy their new car and not have to worry about getting things fixed. Also, incentives, low interest rates and rebates can discount several thousand dollars off the price and entice customers to purchase a new car. The automotive industry is very competitive and the factories and dealers are pushed to get the new car price and interest rate down as low as possible for the customer. These are all great reasons customers give for wanting to purchase a new vehicle instead of used.

However, there is only one major reason to buy a used vehicle. The main reason customers buy used vehicles is to save a lot of money. The automotive industry is flooded with used vehicles also. This makes a new car's value almost $10,000 less as soon as it is sold. Customers can find thousands of low mile used cars at Dealerships usually called program cars and are the same model year as the new ones. Typically most of these program vehicles have been rental cars which get regular required maintenance from the rental companies. However, some are traded in my business owners who do a lot of traveling and put on miles fast. Some are traded in by families needing more space or just wanting a different vehicle. Most of these program vehicles have had very little, if any, problems with them needing repairs.

The most appealing thing about these program cars is they still have the remainder of the factory warranty covering them bumper-to-bumper just like a brand-new car. The customer can still have the same worry free security gained from a new car when buying a used program car and still save tons of money. Still having the remaining factory warranty also makes it fairly inexpensive to add an extended warranty to these vehicles up to 100,000 miles with power train only or bumper-to-bumper coverage. The cost of extended warranties at a dealership ranges from $1000-$3000 depending on the amount of coverage purchased. An average warranty purchased for a used car is around $1500 for 80,000 miles of coverage.

 For example, a 2007 Dodge Charger (stock # 7H804055) originally cost “$28,170” (Auto Trader) brand-new and only comes with a 3 year or 36,000 bumper-to-bumper warranty. A customer can purchase a used 2007 Dodge Charger (stock # R2579) with approximately 16,000 miles for “$19,788” (Independence Honda). This used 2007 Dodge Charger – 6 cylinder, four doors, and 2 wheel drive – can be purchased for $19,788 which comes with the remainder of the 3 year or 36,000 mile bumper-to-bumper warranty and an additional 80,000 mile power train warranty included in the price. Subtract the $1500 average warranty cost from $19,788 and the cost is $18,288 instead of $28,170 for a new – 6 cylinder, four doors, and 2wheel drive, Dodge Charger.

 This used 2007 Dodge Charger program car is a great deal and so are the rest of the used program vehicles at dealerships all across America. “You get a very clean used car, with the advantages of reduced depreciation and the peace-of-mind of some level of additional warranty coverage. Unless you're the type of person who absolutely, positively needs a brand-new car, you will benefit tremendously by checking out a manufacturer's certified pre-owned inventory.” (Kelly Blue Book) Well, it seems there are approximately $10,000 reasons for buying a used car over new. A $10,000 savings also equates to approximately $200-$250 less a month and payments depending on interest rates and down payment. 

 The used car price and payments fit in most customers’ budget a lot easier and is ultimately the deciding factor in choosing used car over a new car.  The customer must decide to buy a high-priced new vehicle with a full factory warranty or save a lot of money and buy a used car which may have a few blemishes. Do they tighten their budget to be able to afford the new car they can say no one else owned? Will they save thousands of dollars and drive the same year car with a few miles and more warranty then you get with a new car? If the customer buys the new car they will lose $10,000 as soon as they sign the paperwork and the new car will then become a used car anyway. A new car would be nice, but being able to get the same car with the same equipment for $10,000 less and save $200-$250 extra month in the bank is the smart thing to do. When the customer is driving down the road in the same year car no one knows it was purchased used. They only see them sitting up a lot higher with the $10,000 in their back pocket.

Work Cited

Auto Trader. www.autotrader.com. (June 5, 2007).

Independence Honda. www.independencehonda.net. (June 5, 2007).

Kelley Blue Book. www.kbb.com/kbb/Advice/Step.aspx. (June 5, 2007).