Why Should Millennials Buy Used Cars?



Why Should Millennials Buy Used Cars?

Right now, Millennials are 22-37 years old, and are thinking of buying their own car as they’re becoming a little more stable in life. If you’re a millennial and are thinking of buying your own car, consider buying a used car instead of a new model. Here are a few reasons why financial experts suggest millennials should buy used cars.

The Financial Perspective

Millennials have a different financial perspective than previous generations. Millennials are at an age now where they need to spend money on childcare and rent. It’s also extremely common for millennials to still be paying their student loans. Most millennials aren’t making as much money as their parents. A millennial will look at a car loan as an unnecessary payment that will eat away at their savings. Buying a used car is a better financial decision to them. Now, let’s look at the advantages of buying used cars.

Benefits of Buying Used Cars

A Used Car Is as Good as New

Used cars used to be considered unreliable, but the market has changed. Car manufacturers and leading car dealers offer certified pre-owned programs that makes used car buying easier and safer. Just like a new car, the pre-owned car comes with a warranty to bring peace of mind. Today, buying a pre-owned car is as safe as buying a new car, and there are several advantages used cars have over new vehicles.

Lower Insurance

Insurance also factors into your car budget. It’s more expensive to insure a new car, because they are more expensive for the insurance company to replace in an accident. New car premiums are higher to cover the cost for the company. Pre-owned cars have the option to transfer the insurance policy to the new buyer. If the owner has not made any insurance claims in the past, the new premium is usually much lower.

Depreciation

Depreciation is a big factor in car purchases. By the end of a car’s first year, it loses 20% of its total value. If a new car costs $20,000, by the end of the first year its value drops to $16,000. Also, if you took out a loan for the car, you owe more to the finance company than the value of the car. Depreciation works in the favor of a used car buyer. Millennials can purchase the car at a fraction of its original cost after 3-5 years. This can help them save good amount of money. A millennial with good saving habits can purchase a used car without taking out any loans at all.

Millennials like to stay within their budgets, and buying a used car ensures they are not purchasing anything beyond their means.


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