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Published On: Tue, May 14th, 2019

Why Buying a Used Car Makes Sense to Millennials

If you’re a millennial and you’re looking at buying a car, you have to consider if a brand new car or used cars for sale is the ideal fit for you. To answer this question, careful consideration of a range of factors is essential to outline them to help you understand the option that suits you best.

Spoiler alert: With a lot of used cars for sale in Abu Dhabi, we believe that used cars will be the better fit for Millennials. Here’s why:

When it comes to their finances, Millennials have had it tougher than the Gen X or the Baby Boomers. Millennials are the people born between 1980 and 2000.

photo/ Michael Jarmoluk via pixabay

Rapid Rates of Depreciation

As soon as you drive off the parking lot of a car dealership with your brand new car, there’s an instant loss of 10% of its total value. There’s another 10% loss of value over the first year of ownership. By now, the car is probably worth lesser than the loan you availed to buy the car. This is known as “upside down” or “underwater” on your car loan. To add to this, there will be a further drop of 15-20% in the value of your new car each year over the next few years. The total worth of your car drops to 40% of its original price just after five years.

If you find used cars which are less than five years old and have been tended to with frequent maintenance services, you’re getting an almost new car with a much more economical price tag. This is because the previous owner absorbed the hit of all that value depreciation. Given the gross financial constraints of Millennials, the under 30 age group would be doing themselves a favor by venturing into the used car market.

A Car Loan is Reason Enough for Young People to Buy Used

With all the financial troubles of Millennials, a car loan would be the only viable option for most people to pay for their car. A hefty price tag of a brand new car involves the financing of a large amount, which in turn increases the interest payments of the car loan over a period of time. If you go ahead with the smart choice of buying a used car, you’ll be getting a better deal for your money, as well as, having to pay back a lesser car loan over a shorter period of time. A high interest loan over a long period of time, which will be greater than the value of the car, is the last thing a millennial needs in their life. The only thing you have to look out for when you’re in the market for buying a used car is to choose a good option for your lifestyle with a healthy vehicle maintenance report. Well-reputed car selling companies such as Carswitch do rigorous checks on the quality of the used car to ensure that you get the best product.

Different Set of Priorities

Millennials have a number of things and goals in life that they want to accomplish before a certain age limit. And, sometimes buying a car is not one of them. However, they do believe that there is a need for them to drive as the place they live in calls for it. More and younger adults are looking to spend their money differently. There has been a rise in the number of startups with the help of ever growing technology in the recent past which requires capital. This in turn takes away the dream of Millennials being able to own brand new cars. Acquiring a used car will be an easier goal to achieve than buying a new one at the dealership.

Lesser Money to Spend

Whilst there are other factors as to why a used car is a better option for Millennials, one of the crucial factors is that there’s just not enough money for them to spend on large ticket items such as a brand new car within their stipulated budget, as they would have other commitments or debts to pay back. Hence, going the used car route is the best practical option for Millennials as it would help them save their funds for bigger goals, as well as, to get through the month easily.

Author: Bhuvaneshwari R

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