If you are living on a tight budget, that’s no picnic. However, you can often figure out ways to do it if you can be both frugal and creative. It is not an ideal situation, but if you are trying to survive on very little income, you often have no choice in the matter.
For instance, if you need a form of personal conveyance, then you might want to look into getting a used car instead of a brand-new one. Waxahachie used cars are available if you live in that area, and there are many suitable options from which to choose.
In this article, we’ll explore a few ways that a used car can save you money. You will definitely want to consider these if you’re focused on getting yourself a vehicle sooner rather than later.
You Won’t Have the Upfront Expenditure That Comes from Buying New
First of all, if you buy a new car rather than a used one, you should not have to pay as much upfront. If you buy a brand-new car, then it’s highly likely you will need to put down a large chunk of money upfront. That’s true whether you pay for the whole thing at the time of purchase or if you put down some of the total price and then finance the rest.
If you buy a used car instead, then you will likely have to put a lot less money down at the time of purchase. You may even be able to put no money down if you have at least decent credit and you can find a used car lot willing to do it.
With a Used Car, Your Monthly Payments Should Be Less
If you buy a used car, then you will also notice that you have monthly payments that are a lot less than you would expect to pay if you bought a brand-new car, or even a certified pre-owned one. If you buy a used vehicle, you might pay a quarter or a half of what you’d pay if you bought one brand-new.
If you have to spend less on your monthly car payment, then you can put that money toward other necessities. Those might include things like rent, your internet bill, your phone bill, etc.
If you have enough money to cover all of those, then you might be able to put the cash that you’re saving into a savings account. Having that money in reserve that you can utilize if there is a sudden emergency is of vital importance.
There is Slower Depreciation
If you buy a brand-new car, then you have probably heard how it drops in value the second you have signed the papers and driven it off the lot for the first time. It will continue to depreciate in value the longer you have it, but because it was brand-new when you bought it, there’s a huge drop off that you will see with it that you would not with a used car.
It is true that any car will depreciate in value, even a used one. However, this process is a lot slower and less significant if you buy one used. Within a year of owning a used car, it might lose $1,000 in value. A brand-new one might have lost $5K or more.
This means that if you buy a brand-new car, you can enjoy all the good things that go with it, but your net worth will be taking a huge hit. It is just an undeniable fact if you buy a brand-new car.
You Will Pay Less for Your Insurance
It is also notable that if you buy a used car instead of a brand-new one, you will likely have to pay less for the insurance policy for it. That can be a pretty huge difference if you look at what you are paying in insurance each month, but it becomes even more significant if you look at the difference in cost for a policy for a whole year.
If you have to pay less for your car insurance for a used vehicle, then once again, you are looking at money that you can put away or use for other necessities. The difference might not seem that much if you’re more financially comfortable, but for someone doing all they can to keep their head above water, every penny counts.
You Might Pay Less for the Registration
In some states, you will also notice that the cost of registering the car will be less if you buy a used one versus a brand-new or certified pre-owned one. This is not true in every state, but it’s the case in several of them.
If you can pay less for the registration, that’s less money overall that you have to put toward the car. When you’re trying to pull the money together to get yourself the vehicle, this is an expense that you have to factor in. You need to understand that the cost to get yourself out there on the road will be more than just that of the vehicle itself.
You’ll Pay Less Each Month if You Get an Auto Loan
There’s one more way that you can potentially save some money if you buy a used car instead of a brand-new one. That is how much you will need to pay each month if you get an auto loan.
If you get an auto loan, another way of saying this is that you got financing. You might get financing directly through the car dealership, but you’ll often do better if you go through an entity like a credit union or bank.
You can probably pay less in interest each month if you borrow less from the lending entity. This means by buying a used car instead of a new one, there’s a lower price tag each month when the lender wants their payment. You should consider all these factors when determining whether to buy new or used.