Ask some people to consider buying a used car, and they’ll probably picture a dumpy, crumbling wreck of a vehicle in the corner. While in some cases, this can be true (though I’d check your sources if that was the case), more often than not it’s a sound investment.
In recent years, the sales of used cars have continued to grow. In 2014, they grew almost 6 percent compared to 2013, reaching a hefty total of 1,750,675 in Q1. There are several factors we can attest to this growth, and it’s indicative that this will never slow down.
As our economy continues to struggle and people have less and less money, it’s a good sign to see certain industries thriving. This is a trend that will keep on going, and here are some reasons why.
Decisions, decisions // Source
Brand new cars are limited in that manufacturers can only make so many models. Eventually, older models get phased out and new ones get brought in, which means some cars are lost forever. Potentially.
That being said, the used market affords you the opportunity to reclaim one of these older models. You could pick up a sleek Mustang Turbo, or a 1968 AMX. You could buy used Mercedes-Benz cars that aren’t sold brand new anymore, which could mean you have a rare ride. In short, it’s hard to deny the wealth of options that the used market offers you, and is a reason as to its popularity.
Depreciation trends // Source
Depreciation is the difference in the value of your car from when you buy it, to when you sell it. More often than not, this can be a huge drop off – usually reaching thousands of pounds. A medium-sized car that was bought just a few years ago could have lost £10,000 in value by now.
Used cars are less of a victim of depreciation, and as such, can be a more stable investment. If you buy a car that’s a few years old, it may already be at the end of its ‘depreciation span’. This means the price you buy it for and sell it for will not be too far apart from each other, as it’s already done the big drop before you bought it.
Avoid new car fees
Buying a car brand new from any sort of dealership is likely to incite a number of fees. These range from taxes, preparation fees and processing fees. However, by buying a used car from a friend, or from a third-party seller, you can have a much cheaper experience.
This is without factoring in the inherent cheaper cost of the car itself. It goes without saying that a used model of a car will be cheaper than the new version. Besides vanquishing any of these hidden costs, you’ll have less to pay upfront, too.
And that, while no big secret, is the main reason why the used car market is so popular. The previous two factors do play a role, but it’s the costs which win the day. There’s absolutely nothing wrong with saving money and still getting a car, and it’s something millions of us are doing.