High-mileage vehicles aren't always the best investment, but there are times when buying a high-mileage car isn't a bad idea. Whether or not it makes sense for you depends on your situation. Here's what we know about buying a high-mileage car and whether or not it's worth the risk.
What's Considered High Mileage?
There were times not long ago when 100,000 miles on a vehicle was considered extremely high. These cars once deemed too old to be resold on many dealer lots, are currently seeing a resurgence in sales. Nowadays even vehicles with 150,000 miles or more can be found at some dealerships.
This is in part due to the lack of new vehicles that were being produced due to the ongoing chip shortage and supply chain issues that are still plaguing automakers. But it's also due to the fact that cars are just lasting longer. According to a recent report from S&P Global Mobility Reports, the average age of vehicles on the road is just over 12 years old.
Can I Finance a High-Mileage Car?
Even though you may find these older, high-mileage vehicles on dealership lots these days doesn't mean you can always finance them. Some lenders, such as credit unions, and online lenders may be more willing to finance a high-mileage car than a standard bank, but many factors come into play.
If your credit is on the lower end of the scale, around 670 or below, you may have more trouble financing a car with high mileage. There are many stipulations on auto loans for bad credit borrowers, and whether or not you can finance may depend on your credit and the cost of the car.
Since these vehicles typically tend to have lower prices, they're often better as a cash purchase than a financed vehicle. Historically, these vehicles have a lower cost on dealership lots than other vehicles, and with lenders having a minimum allowable loan amount, some high-mileage cars don't qualify for a loan due to their low price tag.
When it comes to bad credit borrowers, the minimum loan amount is usually around $5,000, though this may be changing due to the higher price tag on many used cars these days due to tight new-vehicle inventory.
What are the Risks of a High-Mileage Vehicle?
When it comes to getting a high-mileage car, a lot of your risk can come down to mechanical failure. In some cases, older cars are harder to repair or have parts that are hard to find. If enough parts go that it's no longer worth it to fix the vehicle, you still have to finish paying for it if you have a loan. This could mean paying for a car you can no longer drive.
The potential risks go beyond mechanical though, depending on the age and popularity of your vehicle. Another risk is negative equity, with a high mileage vehicle, you run the risk of immediately owing more on the loan than the car is worth. This means if you need another one, this vehicle won't be an asset toward the purchase of your next car. High-mileage vehicles are harder to sell or trade-in than their lower-mileage counterparts.
Should You Risk a High-Mileage Car?
Whether or not a high-mileage car is for you depends on your situation. If you find a high-mileage vehicle that's in good shape, many of them can last to 200,000 miles and beyond these days. But, some higher mileage vehicles aren't designed to be daily drivers or have too much wear and tear to do the job they were once made for.
Remember, as with any used car, one of the best ways to find out if a high-mileage vehicle is a good investment is to take it to an independent certified mechanic for a pre-purchase inspection. This typically costs a few hundred dollars but can be worth it in the end to get a vehicle that will last. If a dealership refuses to let you take the car for an inspection, this should be considered a red flag.
In today's automotive market, you can find cars that run the gambit in mileage, just be sure to do your homework and get a car that's right for you!