Financial Blog

With the pandemic going on, owning a car has become an advantage. Your travels became faster, cheaper, and safer. You can run errands and get to work without having to face the daily hassles of commuting. But how easy is it to get a car? Do I need to get a brand-new one? Can I afford it with my current budget? These are the questions you need to ask yourself before diving right in. 

If you’re on a tight budget and the goal is to save more money, a bank-repossessed car is a perfect option for you. And with proper research, you can get the latest car model in good condition, and at a lower price.

Read more: What You Need to Know About Bank Repossessed Cars

If you’re still in the process of deciding, here are the pros and cons of buying used cars that could help you.

Pros

1. Huge price discount

One of the benefits of buying a used car is the money you can save from it. You can save up to 40% off the cost of a brand-new. If you want to buy a car with a limited budget, this can be an attractive alternative. Of course, the value has depreciated over time, but the amount of money you’ll save is too hard to ignore for someone with a limited budget for a decent car.

Banks sell repossessed vehicles for much less than their original worth. Some banks even offer occasional promos and sell them in bundles or lot sale offerings. They are not looking to make a lot of profit from selling repossessed cars. Instead, they need to dispose of these cars quickly to reduce the costs of storing and maintaining the vehicles.

2. Safe and trustworthy sellers

The bank, as a reputable financial institution, assures you of a legal and secured transaction. However, on the other hand, buying a second-hand car from a private seller can be a risk for fraud since you’re dealing with someone you don’t know. To avoid any risks, make your transactions only to well-known institutions.

3. Wide payment options

For payments, you may either pay for your car purchase in cash or auto loan, depending on the modes of payment the bank offers. However, paying in full cash has an advantage because you will not pay any interest over time, while an auto loan is lighter on the pocket because of the monthly installments. Unlike buying a brand-new vehicle, a used car or sale purchase involves less paperwork. Banks want to sell their repossessed cars right away.

Cons

1. Finding the best deal requires time and effort

To not regret your purchase, you’ll have to exert time and effort into the entire buying process, especially in bidding and inspection. Expect to make a lot of bids to various banks used car auctions. Banks may reject your bid offer if it’s below the minimum bid amount set for each car for sale so, learn how to bid strategically. 

2. Most dealers don’t allow test drives

Yes, you read it right. Most of them don’t allow it. That means you’ll not be able to pinpoint some problems until you start using it. However, you can still start the car engine so you can hear how the engine sounds. To be sure, come with a trusted mechanic to help you assess the condition of the vehicle.

3. You’ll have to clean your car

Because banks store these cars in warehouses, the vehicles tend to be covered in thick layers of dust and gunk. It’s not that huge of a downside but it’s also an important thing to note so you don’t get your hopes up. If you scored a great deal, what’s a few bucks more to pay for a quick car wash session?

Final thought

Now that we’ve shown you the advantages and disadvantages of buying a used car, you must decide if it’s the right fit for you. If you choose to push through, be cautious and strategic. Then, apply the things that you’ve learned to ensure you’ll get a good deal and eventually drive a quality car that fits your budget.