Used cars are typically less expensive than new ones, and so the loans for them are often smaller, said Philip Reed, an automotive writer at personal finance website NerdWallet.
“If you turn on the football game, you will be brainwashed into thinking you need a new car,” Reed said. “People don’t understand how reliable a good used car can be.”
While the average vehicle on the road is around 12 years old, Reed said, a car’s price tag can be cut in half after just three years.
The average monthly loan payment for a used vehicle in January was $407, nearly $150 less for a new car, according to Edmunds.
Thoroughly vet the history of any used car you consider buying, Reed said. Using the vehicle identification number, located on the driver’s side dashboard, you can check the car’s history with the National Insurance Crime Bureau, CarFax or the National Motor Vehicle Title Information Center. You may also want to have the car inspected before you buy it, to make sure nothing was missed on the car’s record.