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Understanding Car Depreciation – New v/s Used Cars

Everyone dreams of owning a car. The decision of buying a particular car is based on a number of factors. The most important factors are usually finances as well as the resale value of the car. Most buyers face the question of whether to buy a new car or go for a used vehicle. When you look at these options, you need to be informed on the topic of depreciation. Understanding car depreciation will help you make a wise decision while buying a car.

If you compare a new car to a used one, you will find that the new one depreciates faster than the used one. If you drive off a brand new vehicle from the show room, then the car already loses 10% of its value. When it comes to used cars, you will find that it has already gone through its initial stage of depreciation, hence will not lose a lot of value when you drive it off the used cars yard.

If you do your math well, you could possible conclude that a new car is not a good investment. Instead, you can get great value for money when you buy a properly maintained used vehicle. You not only get a car in good condition, but also get a car at an affordable price. You can even pay for a used car in cash which gives you space to bargain for a good price. This is a key point in understanding car depreciation.

Obviously, you can gain more when you invest in a well maintained used car. However, this does not mean that used cars do not depreciate. Rather, used cars depreciate at a slower rate than their new counterparts. Used car depreciation is also directly proportional to the amount of mileage you put on it.

People generally avoid buying used cars due to the fact that they do not know why the previous owner wants to get rid of it. This problem has been overcome by certification of pre-owned vehicles.

There are also vehicles that you should rather buy as new. They are generally cheap and the price difference between a new and used car for these models is very small. Such cars include models from Suzuki, Kia and a variety of Hyundai.

If you choose to buy a used car, then take care of the following facts before driving off your second hand car:
 
• Buy a used car from reputable dealer.
 
• Make sure you check out the history of the car. Certified pre-own cars often have the full history available.
 
• Never pay a car owner higher price than what the value of the car is placed at.
 
• If possible, pay cash as this enables you to bargain on the price and you will not be paying constantly on depreciating merchandise.

Buying a car is a big investment and paying close attention to details will help you make the right decision about buying a car.

Larry Vonn Curtis is avid car fan. His motto is to help people finding the best new or used car for the hard earned money spend behind buying it. He is working for Chapman Las Vegas since decade. To find out and get the best deals on used cars in Las Vegas visit Chapman Las Vegas.


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Comments (1)

  • Nicole

    Thanks for the tips, your article is very simple for one to understand car depreciation whether it’s a brand new or second-hand.

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