While buying a car, you have a lot of choices to make. With so many brands available on the market, it is quite tiring and confusing. Also, then there is a choice between a new car and a used one. It is an important decision to make as it can make a massive difference to your finances. Also, one should know that buying a car is not an investment. In fact, once it is bought, the vehicle only depreciates. Your options could also be based on the fact if you qualify for a loan or need to pay in cash.
We can help you with some tips on buying new vs. used cars:
1. Advantages of a new car
The main advantage of buying a new car is that you are purchasing a vehicle that comes with a warranty and most of the repairs and replacements in that stipulated period are free of cost. In addition:
- Financing for a new car is much easier and cost-effective. A dealer might reduce the amount of interest on the payment over the life of the loan.
- Another good thing about buying a new car is that the car would be the latest on the market with the newest technology. It will give you better mileage and have lower emissions. You might also be able to buy a hybrid model and pay less on transportation each month.
2. Disadvantages of a new car
The main drawback of buying new vs. used cars is that it depreciates as soon as you leave the showroom. Its biggest depreciation takes place in the first 2-3 years. So you need to accept this bitter truth. Yet:
- Buying a brand new model could be risky as all the loopholes and problems have not yet been discovered. You might buy it thinking it is a great car but find out about its issues only later, which is another gap in buying new vs. used cars.
3. Advantages of buying a used car
The main advantage is that someone else has already borne the brunt of the biggest depreciation and you might be able to sell the car for almost the same amount that you paid for it in the future. Of course:
- You can get decent financing from a local bank or credit union. Since you are not losing any money on depreciation, you may be better off than a zero-interest loan that you would have got on a new car.
- Since the car is already tried and tested, you know about its follies and performing areas. It helps you make an informed choice.
- Depending on the model, the insurance rates might also be lower than a new model.
4. Disadvantages of a used car
Reliability might be an issue, and you may have to spend a lot more on repairs. You might have to spend a lot on repairs and replacement. However, also consider that:
- The mileage of a used car is not as good as a new one.
- You may not have a choice in basic things like the color of the car, the kind of seating.
- Since it is an older model, it will not be equipped with the latest technology in terms of engine and also other creature comforts.
Buying a car is a tough decision, and one should do thorough research and weigh the pros and cons before making a choice. This guide should help in deciding on buying new vs. used cars.