Should you Buy a Used Car? Read the Pros and Cons here
For some people, buying a used car in Dubai might not be the best decision. However, they don’t know that buying such a car comes with a wide range of benefits. Sure, everything has its pros and cons and so does purchasing a used car. But most of these have stemmed from false beliefs and notions.
Today, we are going to discuss the pros and cons of buying a used car. Read on to know more:
Pros of Buying a Used Car
There is nothing to feel shy about. The biggest advantage of buying a used car would be cost-effectiveness. During the first 3 years of ownership, new cars tend to depreciate rather drastically. So, when you buy a used car, you let the owner take up most of the depreciation costs. Since some cars depreciate faster than others, pay attention to the residual value.
There Is No Need for Loan
Experts recommend saving money ahead of time and then pay in cash. Most of the auto loans have about 4-5% interest. It may not seem like much but can add significantly to the principal amount. For example, if you get a $20,000 car with a 5% interest rate and a minimum payment of $500, you would end up paying an interest amount of $2000 apart from the initial balance. And in case of poor credit history, it could get a lot higher.
Save money on Auto-Insurance
Compared to new cars, used cars are normally cheaper to insure. The reason? They are cheaper to replace as well. With used cars, you have to pay less for insurance. And as cars tend to get older, their value begins to decrease as well.
You Can Get a Good Deal
Every year, new cars lose about 15% of their value. And although it could be bad news for the owner, it may work out in your favor. Why would you want to pay full price for a new car, you could own a used car for a fraction of that price, which is almost as good.
Reduce Your Risk by Purchasing Certified Pre-Owned
Certified pre-owned vehicles happen to be a safe option as the manufacturer inspects and certifies the car. In some cases, they are a bit more expensive than used cars, but the peace of mind that you get out of it is worth the investment.
Cons of Buying a Used Cars
Here are some of the cons of buying a used car:
When it comes to buying a used car, you may not have a lot of options to choose from. You can make your pick from what is available in the market at the moment.
Compromise on Color and Style
When you buy a new car, you can get anything you want. Most of the dealers even allow you to customize the color, interior style, and many other things. However, with a used car, you may have to compromise on the color and style. Also, you won’t get a customized option either. You will either have to spend more time searching or accepting what you get.
Might Get Stick with A Lemon
Another possible disadvantage of buying a used car is getting stuck with a faulty car. Especially, when you have a limited budget. Unlike new cars, most used cars do not come with a warranty. And if you have your heart set on a late-model used car, it might have some factory warranty left. In that case, though, you can always extend your warranty without burning a hole in your pocket.
Expenditure on Gas & Repairs
With new cars, not a lot of maintenance is required and they are more fuel-efficient. But, old cars required a lot of maintenance. Nowadays, cars are built to last, if the previous owner has maintained the car, chances are you may not have to face any such problems. But even then, you must get your used car thoroughly inspected from a mechanic before buying.
Higher Interests Rate
You may or may not have to pay a higher interest rate when financing for a used car. Most of the lenders charge a higher interest rate on used cars. And new cars sometimes come with financing incentives that are as low as 0%.
Wrapping up, if you want to save up and be relaxed about your purchase, then your best bet will be buying a 3-4 years old used car from Dubai car dealers and using your savings towards buying an extended warranty.
Hey everyone! My name is Alfred Williams and I am passionate about business and finance. I have been working and managing in these fields for over 10 years. I have expert knowledge of market strategies, financial analysis, and decision-making processes. I also have experience in consulting and budgeting. I'm excited to use my knowledge and expertise to help others achieve their goals. Follow me for the latest insights on business, finance and decision-making. Business, finance - let's get started!
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