Reasons to Buy a Pre-Owned Car

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - October 5, 2020

Many people feel uneasy about the idea of purchasing a used car. For bad credit borrowers, though, they’re a great way to save money, build good credit, and likely lead to more disposable income each month.

Pre-Owned Vehicles Are on the Up-and-Up

Pre-owned vehicles are flying off the shelves – well, car lots. The latest data suggests that the pandemic has pushed more buyers, even those with good credit, toward the used selection on a dealer’s lot.

Experts believe the biggest reason for this shift is due to the lower sticker price combined with borrowers feeling less secure in these turbulent times. Another theory is that new borrowers are entering the auto market due to concerns of using public transportation during the COVID-19 pandemic.

However, these aren’t the only reasons why someone would want to buy a used vehicle. We’ve gathered four other reasons on why you should consider one, too:

  1. Cars are standing against the test of time. Vehicles are lasting longer than ever before. The average age of a used car nowadays is around 12 years old, and 25% of vehicles on the road are at least 16 years old. Cars are lasting longer and more able to handle over 150,000 to 200,000 miles.
  2. A pre-owned vehicle has likely seen its steepest drop in value. New cars generally see around a 20% drop in value within the first year of ownership, and depreciation remains steep for the first few years. Used vehicles, though, have likely already passed that huge drop in value, since deprecation slows down over time. Buying used, you’re likely to get a selling price on the car that’s more reflective of its actual value.
  3. Used vehicles can offer lower monthly payments and interest charges. If you have less than perfect credit, hefty interest charges can be a concern when you finance a car. Bad credit borrowers may find themselves only qualifying for interest rates in the double digits. Save yourself cash by financing less, since the less you finance, the less interest charges you accrue during the loan.
  4. New vehicles risk more negative equity. Brand-new cars not only come at a higher price, they also have a high risk of putting you in a negative equity position. Since new vehicles depreciate so fast out of the gate, many borrowers find themselves owing way more on the car than it’s worth. Combine that with a high interest rate, and you’ve got trouble brewing for more credit issues down the line.

        If the idea of financing a pre-owned vehicle worries you, you’re not alone. However, there are used cars that can come equipped with some more peace of mind.

        Newer Used Vehicles

        You don’t have to settle for a used clunker when you’re shopping for a used vehicle. If you’re a borrower that’s concerned about reliability and you’d like a newer car without the high price tag, then a certified pre-owned (CPO) vehicle could be for you.

        CPO cars are often called the cream of the crop of used vehicles. These cars come with some sort of manufacturer-backed warranty, are typically only a few years old, and usually have less than 75,000 miles on average. Many CPO vehicles are just coming off-lease, which also means they’ve likely only had one previous owner.

        Before a car can become a CPO, they must go through a rigorous inspection done by a manufacturer-certified mechanic. The vehicle is then cleaned, refurbished, and prepped for sale per that manufacturer’s stipulations.

        These cars are usually less expensive than your typical brand-new vehicle, but can also carry a higher price than a run-of-the-mill used car.

        Start the Auto Financing Process

        For borrowers with credit issues, used vehicles are a great way to dust yourself off and build your credit score. Pre-owned cars tend to be more affordable for bad credit borrowers, and choosing a less expensive vehicle can mean a higher chance of landing an auto loan approval.

        Finding a lender that can work with a lower credit score isn’t always easy. They’re often located through special finance dealerships, but picking one out of the crowd can be difficult. Finding a car lender for credit-challenged borrowers doesn’t have to be a hassle if you start right now with us at CarsDirect.

        We’ve cultivated a network of dealers that are signed up with bad credit lenders, and we want to look for one near you at no cost. Fill out our secure and quick auto loan request form, and we’ll get right to work finding a local dealership with the resources you need.


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        , Content Manager

        Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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