Why Depreciation Makes Buying A Used Car A Great Decision

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Purchasing a car, whether brand new or used, is always an exciting decision. However, many people are hesitant to buy a used car because of the idea that they're old and might not be in good condition. But did you know that buying a used car can be quite a smart financial decision? One of the reasons why this is better than buying a new one is depreciation. What do you need to know about this factor, how it affects cars, and why buying a used car is a great decision?

What Is Depreciation?

Depreciation is a term used to describe the decrease in asset value over time. Sadly, cars are some of the fastest-depreciating assets out there. When a brand-new car is driven away from the dealership, its value drops significantly. This means that if you buy a new car today and decide to sell it a few years from now, you may only be able to sell it for half the price you originally paid for it.

Why It's Often Better to Buy Used

This is where buying a used car comes in. When you buy a used car, you're actually buying a car that has already taken a hit in value due to depreciation. This means that the initial significant decrease in value has already happened, and the car has already gone through the steepest part of the depreciation curve. This makes used cars significantly cheaper than brand-new cars without compromising the quality and performance of the vehicle.

What Are the Additional Advantages of Buying Used?

Another advantage of buying a used car is that you'll be able to get more features and amenities for your budget. If you were to buy a brand-new car with a specific budget, you'll only be able to get a base model with minimal features. However, if you buy a used car within the same budget, you'll be able to get a car with more features and accessories. This is because the original owner of the car has already paid for the additional features, but you get to enjoy them for a lower price.

What to Remember

In conclusion, buying a used car is a smart financial decision for several reasons, the main one being depreciation. You'll be able to get a car at a cheaper price without sacrificing the quality and performance of the vehicle. Additionally, with the money saved from buying a used car, you can invest in other important things such as emergency funds, retirement plans or just put it back into your budget. So, the next time you're in the market for a car, don't shy away from buying a used car. You might be surprised at the great deals around.