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3. Taxes are an additional reason that used cars are sometimes
preferable to a new car. Most purchasers will pay taxes when they
license the car. While there is also tax on used cars in some
states, the amount due is typically less simply because used car
prices are lower than new car prices.
4. Insurance costs should also be considered when deciding
whether to be shopping for used cars for sale or a new car. As a
general rule, a car with a lien against it must have comprehensive
insurance. The reason is simple. If a car is totally destroyed in an
accident, the lender then has nothing to repossess. An owner with a
demolished car is arguably more likely to default on the loan. Full
coverage insurance will pay for damages or pay the value of the car
destroyed. If the owner has only liability, the lender may find
himself repossessing a worthless vehicle. However, remember that
liability insurance is much less expensive than collision policies.
Cheap used cars will typically be paid off more quickly, meaning
that the owner can drop the insurance to liability only, saving
significantly in insurance costs.
As the buyer, weigh the differences carefully. It’s sometimes
difficult to find quality used cars at a fair price. It can be
argued that most people won’t trade in a car that is still
mechanically sound, meaning that the person who buys a used car may
be purchasing an unreliable vehicle |
