To buy used cars, or to not buy used cars: that is the question!
New Hampshire is bordered by Maine and Massachusetts, as we all know. And we all know New Hampshire is a tax-free state (just not so much when it comes to property taxes). However, Maine and Massachusetts are not as fortunate, and when it comes to purchasing a vehicle, the State wants their share too by charging an Excise Tax and State Tax, in addition to other fees, at the time of registration. Let's use a Chevrolet Silverado for this example. If you went to register a new 2013 Silverado in Maine, you would have to pay 5% sales tax, and 2.4% excise tax based on the MSRP. You add this and multiply that and it equals WOW! But, if you purchase a used 2010 Chevrolet Silverado, you are still paying 5% sales tax, but the excise tax is only 1%, and that is based on the current book value, not MSRP. That is a humongous savings! This example speaks more than just dollar signs.
Not only do you pay less in registration fees and taxes when you buy used, but you're also paying less on the initial purchase in general. A new 2013 Silverado 1500 has a starting base price of $22,595, but unless your truck is for all work and no play, you're gonna want some of the extras like upgrading to the LTZ package. Then you're looking at around $37,125 (plus delivery, tax, documentation, and registration fees). Or, you can get a 2010 used Chevrolet Silverado, with running boards already included, and have that price come down to $26,995 (plus tax, documentation, and registration fees). That is a savings of over $1,100 in tax alone! Buying used gives you the opportunity to still have the vehicle you want without having to pay for dealer's fees and all the other taxes and charges as if it were new. Who doesn't like to save money?
Let's say you want your payment on your used Chevrolet Silverado to be around $400/month. If you buy new, you may be able to get your payment where you want to be, but it may be over a 72 month stretch. You end up paying thousands more in interest because the length of your loan is so long. In turn, that can lead to buyer's remorse and a feeling of being plain ol' stuck. Buying pre-owned can get you a shorter term and save you money in interest in the long run. Plus, if your initial cost is lower, and you are not paying as much in taxes and other fees, you can pay the $400/month that you wanted and pay off your loan quicker. In addition to lower financing costs, your insurance premium may be lower on a used vehicle as well. The easiest way to look at it is, the higher the cost of the vehicle, the higher your insurance premium will be because there is greater risk involved for the insurance companies.
Just because a vehicle is used, or pre-owned, doesn't mean it is an old rust box with 200,000 miles on it. Ok, so there are already some miles on the odometer, but vehicles are made to last well over 100,000 miles, and it isn't uncommon to have a used car for sale with low mileage. You may even be able to purchase a used vehicle that is still covered under the original manufacturer's warranty. If it isn't, there is a solution for that too. Dealers offer extended warranties for purchase, which is a small price to pay in comparison to what could end up being costly repairs over the life of the vehicle. Maybe it isn't just about the mileage that makes you leery of buying a used car. Maybe you have heard horror stories of odometers being tampered with, or what was listed as a minor accident was actually a hair away from being a total loss, or the vehicle wasn't just hot in style, but actually hot as in stolen. Luckily, Key Auto Group offers a free Carfax on all our used vehicles. The Carfax report can tell you information like how many owners there were, previous service records, title records, if there were any accidents or damage, the last reported odometer reading, and the type of use the vehicle was for (i.e. personal, rental, etc.). Don't be afraid to ask for the Carfax, be afraid if a dealer does not want to give it to you.
Another great benefit of buying a used car is someone else already took care of the majority of the depreciation for you. The joke used to be that a new vehicle lost half its value the second it drove off the lot. It isn't much of a joke if you find yourself up to your neck in a vehicle that isn't the perfect fit for you, or you're over your head in a car payment that no longer fits your budget and your only option is to trade it in or try to sell it privately. Buying a used car saves you some trouble when it comes to resale value, because the depreciation rate decreases after the vehicle is on its second owner. Why, you ask? Because when you buy a new vehicle you are paying retail price and once it is used it is valued at a wholesale price. The rate of depreciation is typically 15-20 percent of the vehicles value each year, which is why we say your car is never worth more than it is today. So, if you buy a used car and trade it for another used car, it is going to be a much better deal than if you purchased that new Chevy Silverado for $37,125 and had to trade it in the year after and only got $23,000 for it. All the money you spent registering it, all the money you laid out on taxes?it's all gone.
There is no shortage of used cars for sale in New Hampshire, but when you shop with Key Auto Group, you don't have to question if you are getting the best deal or worry about the vehicle history on any of our used cars or trucks. All of Key Auto's Certified pre-owned vehicles have been through a 70 point inspection before they are made available to you. We have a great selection of used cars and trucks at Portsmouth Chevrolet located at the traffic circle in Portsmouth, NH. Feel free to check out all of our pre-owned inventory at KeyAuto.com or stop in at any of our four locations. A member of our friendly sales team would be happy to assist you in finding the perfect used vehicle for your needs. No plaid bell-bottoms or '70s hair-do's are involved!
What about the new car smell? Don't worry, we've got that covered too!
Here's a quick recap of the advantages to buying a used car:
- · Lower registration fees
- · Less excise and state tax (if applicable)
- · Lower price tag
- · Lower financing costs
- · Lower insurance premiums
- · Extended warranties available
- · Free Carfax report
- · Less depreciation
- · You can still get the new car smell
Happy Driving!
