Discover the Best Age of a Used Car to Buy
When planning to buy a used car, it is important to take a look at the overall car value in Dubai before making an offer or purchasing it, but most people are only concerned about the cost of repairs and maintenance. This results from the belief that a new car comes with a warranty that covers maintenance to make out-of-pocket repair costs to be low. However, reliable car manufacturers offer transferable warranties to cover the vehicle even after the transfer of ownership for many years.
With repair costs out of the way when planning to buy a used car, other related costs need consideration. The depreciation cost is usually underlooked by many people when planning to purchase a used car. There’s a belief that a new car depreciates the moment you drive it off the lot yet it is not the case. This article seeks to throw light on the best age to buy a used car putting depreciation costs in mind.
New cars massively depreciate in their first year of ownership. A midsize sedan that goes for about $28,000 is likely to lose value of about $7,500 during the first year. Ironically, the loss in value is likely to drop in the next year to about $1,100. From two to four years, the total loss in value is possibly going to be about $6,000. You can now tell how the loss in value amazingly drops in the first three years than it is during the first year of ownership alone. Therefore, it is a good idea to purchase a used car after its first year of owners to avoid the dip in value that happens during this period.
Two to three years
It is a wonderful idea to buy a used car from the best used car dealership in Ottawa after passing its first year of depreciation. You should purchase a car used for two to three years to incur significantly low costs compared to newer models after driving it for three years. Don’t worry about related repairs. There’s a chance that the previous owner will transfer the bumper-to-bumper warranty to you. And, the powertrain warranty continues after transfer of ownership. So, there are limited chances of incurring heavy costs on repairs.
There’s a possibility of the bumper-to-bumper warranty covering the car in the fourth year depending on the car. This means that by buying a car that is a year or two old and driving it for three years, your total depreciation cost is likely to be about $7,000 or about $2,333 annually. This is because of avoiding the initial loss in value that happens to new cars in their first year of ownership. So, buying a used car more than a year old will give you the best value.
More than three years
Perhaps you’re now wondering whether buying an older car offers more value. Well, this is not necessarily true. This is because the car is likely to face a second steep loss in value although timing depends on the type of car. Luxury cars experience this earlier compared to pickup trucks. The second loss in value happens around the fifth year of ownership. By this time, most cars have covered about 12,000 miles annually with the odometer reading 60,000 miles.
Making the 60,000 miles means the car has some looming service issues including replacing the timing belt, worn-out tires, servicing the brakes, worn-out interior, and paint oxidation. Additionally, the car is likely to be facing scratches and parking lot nicks. Investing in such a car will mean spending a lot to fix all those issues.
It is good to buy an older car despite going through a second loss in value. There’s a possibility to pay less in insurance and low state license fees. Additionally, maintenance costs of older cars are significantly low in the long run. Although depreciation cuts the car value into half after five years, the low maintenance and repairs add about three percent value to the original cost after the five years. And, these costs go up gradually.
In fact, you pay more to repair a five years old car than you pay for one ten years old annually. However, the costs of repairs depend on the car model. Some models such as Mercedes-Benz and Mini Cooper accumulate repair costs as they age. All in all, you can make significant savings when you buy a used car from most brands without worrying about high costs.
It appears that the best age to buy a used car is more than a year after the initial purchase. You then drive it for two to three years to reduce repair and maintenance costs. This is because the car is likely still under warranty and you avoid the two periods where the car losses value. With this in mind, now you can check the pool of used cars to buy from a dealership knowing what will give you good value.
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