Many car shoppers must decide whether they want to pay the big bucks for a new vehicle or “settle” for a used car. The main thought process behind this decision is “I’ll pay more for a new car and less for a used car.” Yes, this is true. What you pay at the dealership is only the beginning of the costs associated with owning a vehicle though. Before you make your final decision, it’s important to consider all costs and fees in the long run, including your car insurance.
First and foremost, used SUV cars cost a lot less than a new one. On average, used cars prices are almost 50% lower than new cars! You could purchase a very nice used SUV in Wallingford, CT for $15,000 when a brand new version of the exact same vehicle costs $30,000. Why is this? Is it because the new vehicle is so much better? No! It is because depreciation has already occured.The reason used cars are less expensive is not because they’re bad, but because they’ve already depreciated. As soon as you drive a brand new vehicle off the lot, the value can drop 11%. This means on the drive home, your $20,000 vehicle is worth only $17,800!
So just by purchasing a used car, you’re saving money. Beyond the initial savings at the dealership, you’ll also be saving money every single month. This is because your insurance will be lower.Your car insurance has to cover what your car is worth in order to replace in the event of a major wreck or other catastrophe. This is known as a “total loss.” If your insurance has to cover a $15,000 vehicle, you’re paying more each month than if it were to cover a used vehicle worth $30,000.
Comprehensive Coverage and Collision Coverage help pay to replace a totaled vehicle in the event of a total loss. These two separate coverages are typically required on your car insurance policy if you’re financing your used SUV for sale in Wallingford, CT. Remember, your car insurance company may staff nice people and have funny commercials, but they are not running a charity. If it costs them more to replace your vehicle, they’re passing those costs along to do. Your monthly premium will be higher and your deductible, the amount you pay before they pay the rest, will be higher too.
A lower insurance payment is just one reason that car shoppers like to purchase a used vehicle instead of a new one, but it’s an important factor to consider during your shopping experience. These monthly fees add up! Not only that, if you should be in an accident with your vehicle, you could find the deductible you have to pay before your insurance kicks in is much higher than what you would prefer. A less expensive, used vehicle is cheaper to buy and cheaper to insure for the entire time you own the vehicle.