If you really need a vehicle but don’t have a lot of money you may be surprised to find that used cars are a real money saver. Perhaps you are familiar with the adage that a new car drops in value as soon as you drive it off the lot. This is actually pretty much true. On the other hand, the value of a car generally holds much longer than the several years of the loan period. This means that used cars can actually be a better value than new cars.
The first key to choosing used cars as a real money saver is to choose a used car that holds its value. One way is to choose from manufacturers who do well in consumer reports. Another is to take your list of favorite vehicles, looks at new list prices at a particular model year, then compare the same prices for each car at some number of years, say five years later (use the car valuator sites that the lending agencies use). If your first car has dropped by 20% and your second by 50%, then you have your answer.
Another strong strategy to take advantage of used cars as a real money saver is to contact a lending agency early in the game. They will have criterion that escalates the interest they charge on the loan. For instance, they may say that the interest will go up for cars over 100,000 miles. They may charge more interest if the model year is older than five years. In any case, try to filter your choice of vehicles to get the lowest interest rate, and you will also be choosing the cars with the best value. This may put your payments higher than you anticipated, but you should be trying for the best used car you can get within your means.
Use these tips and you have a great chance of finding the perfect vehicle for a great price.