Drivers are rethinking whether they want to buy brand new cars, lease, or buy gently-used cars. They've even wondered if buying a car that's over 10 years old could be cost-effective. Data experts on Reddit came up with some interesting information: If the older car is reliable, one of the lowest-cost options is buying a 10-year-old car and keeping it for five to 10 years.
Yes — it's possible to save money on a 10-year-old car that's also safe and reliable. You just need to do your homework and match the car to your budget and driving needs while considering smart options for used car maintenance insurance.
Yes, New Cars Are Expensive
When costs are worked out over time, the most expensive route in car ownership is leasing, followed closely by buying new. The single greatest cost in buying a new car isn't one that most car buyers give much thought: depreciation, or the amount of value your car loses over time. According to AAA's 2018 driving costs study, depreciation accounts for nearly 40 percent of the cost of owning a new car, over $3,000 a year.
Insurance costs are also higher for new cars, averaging more than $1,200 for medium-size sedans in 2018. Along with depreciation, insurance for a new sedan represented more than half of the cost of owning the car for its first year.
In contrast, buying a used car can be much more cost-effective. Insurance costs may be less, especially if you own your car. You may safely drop comprehensive and collision coverage if you don't have an auto loan. You may also opt for lower coverages or a higher deductible if you own the title to an older car, free and clear.
When an Old Car Is a Bad Deal
An older car isn't always the best deal though. If you buy a 10-year-old car with mechanical problems, you haven't saved any money in comparison to a newer model. Some models could have many types of hidden costs, such as a need for costly maintenance or expensive parts that may fail with age. Fuel economy is another cost consideration. Newer cars are almost always more fuel efficient than older ones. If you have a long commute, a 10-year-old car, no matter how reliable, may not be the best financial choice for you.
There's often a reason why many older cars may have a "value price." Although cars are being manufactured to last longer with fewer mechanical problems, cars over 10 years old can be subject to expensive breakdowns and recurring mechanical issues. According to AAA roadside help stats, over two-thirds of calls for assistance in 2018 came from cars over 10 years old.
The wisest course when you're considering an older car is to pay for a mechanical inspection before you purchase it. A thorough inspection can cost between $100 and $150, but if you find out the car is at risk of a major breakdown, that money will be well-spent. Sometimes sellers will cover the cost of an inspection or at least split the cost, especially if they need to sell the car quickly and are confident it won't have any major mechanical issues.
Look for an older car with complete maintenance records including oil changes and tire rotations, low mileage for its age, and an interior and exterior in good condition. Your top priorities in buying an older car should be reliability and safety. Don't buy a car over 10 years old that has problems in either area.
Still Buying an Older Car? Protect My Car Can Help!
If you find an older gem that has everything you want, and it receives a good mechanical checkup, Protect My Car offers the Ambassador Maintenance Plan which can help save on repair costs, maintenance, and 24/7 roadside assistance.
If the used car you're considering is under 10 years old and has less than 125,000 miles, you have another great option with Protect My Car's extended warranty. If you've wondered what the best extended warranty for used cars is, this is it. As long as you follow the recommended service schedule for your car and do your part to maintain your car, you can make an older vehicle a reliable and safe choice — and Protect My Car is there to help you.