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How to Protect your Investment in a Used Car

Posted June 6, 2018 by Lewis R Humphries to Investing 0 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

In many ways, describing the purchase of a used car (or indeed any vehicle) as an investment can be may seem strange. After all, even new cars tend to depreciate in value over time, with the value of auto-mobiles defined by the purpose that they serve during ownership.

However, treating the procurement of a new or used car as an investment can create an altered and proactive mindset, and one that helps you to get the best value for your hard-earned money.

In this article, we'll offer some advice on how to protect your investment in a used vehicle, while also identifying some key areas through which you can save money.

1. Pay Due Diligence when Purchasing a Used Vehicle

Whether you buy a used car privately or through a dealership, it's crucial that you perform due diligence and take practical steps towards safeguarding your investment.

This starts by ensuring that you're given access to the full documentation of a specific vehicle's history, which professional dealerships are duty-bound to provide you with. The same cannot be said for independent sellers, of course, but you'll need to request the necessary registration documentation and MOT history as basic requirements.

In this instance, you must take the time to ensure that any used vehicle is thoroughly inspected by an objective and professional body. Dealerships should already have performed such an inspection before they list a car for sale, but this will be your responsibility to arrange when your make an independent purchase.

2. Invest in Tailored Insurance where Possible

When you buy a new car, it will automatically come with a manufacturers' warranty that provides coverage for a predetermined number of years.

It is possible to seek out a used car warranty, however, which instantly protects the investment that you'll have made and covers you for the cost of unexpected repairs and maintenance.

Once again, you'll need to seek this out proactively when buying a used car, by comparing the real-time market for tailored and cost-effective insurance products.

This will enable you to seek out a warranty agreement that suits your precise circumstances, while it should also allow you to minimise costs and achieve the best value for money.

3. Make a Considered Choice Between Financing and Cash Purchases

On an even more fundamental level, you'll either decide to finance your purchase of a used car or pay for the vehicle in cash.

There are pros and cons to both of these options, and ultimately the choice will be a personal one that reflects your precise financial circumstances.

You'll need to give careful thought to this consideration, however, as this will have short and long-term cost implications that have a direct impact on the overall value proposition.

Most importantly, consider the total value of the car in relation to potential interest repayments, while measuring this against your earnings and outgoings. This way, you can strike the ideal spending balance and ensure that buying a used car doesn't bankrupt you!

About Lewis R Humphries: Lewis is a blogger and researcher from the UK, with a passion for small business growth and personal development.

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