Buying your own car is a huge decision and perhaps the big debate surrounding it is: “Should I buy a new or a used car?” Generally, people use their vehicles for a period of five to ten years, and it definitely is a long-term commitment. It is wise to be sure if you are getting a good deal considering how much time you’ll spend in your car as it should be something you’ll enjoy. In this article, we will lay out some of the pros and cons of each and help you decide which is the best option for you to invest in for your car!
Benefits of buying a new car
People will always want to buy a new car, who doesn’t want and like the feel of a brand new car? There are multiple perks that come with buying a new vehicle. Here are some of the benefits for both: a used car and a new car.1. Better gas mileage
When looking for fuel-efficiency in your car, you might want to opt for a new car. There has been a steady improvement over time when it comes to gas mileage, and new cars generally offer the most miles per gallon. This is especially appealing to drivers who spend most of their time on the road or people who are environmentally conscious.2. Longer lifespan
According to Car and Driver, if you’re driving an electrical vehicle, it is expected to last anywhere between 20-30,000 miles. A new car that has zero miles on it, you can expect it to last longer than the car which has quite a few miles on it. If you’re looking for a long-term car, it is better to buy a new one than a used one.3. Better financing
Manufacturers and car dealerships make the most money on newly purchased vehicles, this way they try to attract buyers by offering a lot of incentives. To push you into buying a new car, dealerships often provide better financing for new cars. Loans for new cars come with low-interest rates and a lot of dealers often offer 0% financing when you buy a new car. Over the time period of the five-year loan, even a slight change in the percentage can make the difference of thousands of dollars.4. Newer technology
There is constantly new technology that car manufacturers are coming out with to help make vehicles safer and more comfortable. You miss out on such new features when you buy an old car. To have the best features and most up-to-date technology on your vehicle, it is advised to buy a new car.5. Warranty coverage
There is no guarantee that a car would be 100 percent without problems. Eventually, some problems or another will occur, and something is likely to break down or will need to be replaced. But with a new car, you’ll get a warranty for a time period that covers many things which could potentially go wrong. Used cars may not get you a warranty, and if it would it won’t cover as much.Benefits of buying a used car
While buying new seems like the obvious choice for some buyers, there are plenty of advantages to opting for a used car instead.1. Lower cost
It won’t come as a surprise that buying a used car means you’ll typically pay a lower price. Often you can buy a car that’s just a couple of years old for significantly less than a brand new version of the same car. If you’re paying in cash, a cheaper car will save you thousands of dollars that you could spend on something else. And if you’re financing, then you can pay a considerably lower monthly payment.2. Slower depreciation
Cars depreciate rather quickly, a fact you may have heard of. Data by CarFax shows that new cars can lose up to 10% of their value in the initial month and as much as 20 percent after the first year. Getting past the initial drop, the rate of depreciation gradually decreases. Buying cars that are just up to two years old could help in avoiding the most depreciation. There are multiple valid reasons why it is wise to buy a car that has already lost some of its value. Primarily, when you invest in a new car you could be under a lot of debt almost as soon you get the keys in your hands. This means that you are paying more loan on the car than it is worth. Another issue with purchasing a new car is that if you decide to sell even just after a year, you will recover very little of the money that you put in. As opposed to buying an old car, which will have a better rate of recovery on your investment.Cheaper insurance
Car insurance companies generally determine premiums based on how they ideally expect you would have to pay out when you file a claim. Cheaper cars are relatively easier to replace if totaled. This results in drivers often paying lower insurance rates for used cars.Low registration fees
A lot of states set the cost of vehicle registration according to the vehicle’s age. New cars have the highest fee for registration and it gradually decreases as the vehicle ages. If your state uses this way to calculate its registration fee, then you’ll save more money each year with a used car.Should I buy a new car or a used car?
There isn’t any generic norm that dictates that you should invest in a new car or a used car. There are equal pros and cons to both and you will find proper expertise on both sides of the coin. It just comes down to what is the best choice for you. It primarily depends upon what type of car you’re considering buying. The lifespan of some cars is lower than others and depreciates more quickly. If the car which you’re considering holds its own well enough, then you may opt to buy a new one. Another aspect to consider is what kind of financing you could get. That 0% interest rate that some dealers persuade you with can be enticing. And depending on the interest rate you would get on used cars, those numbers might work out so well that buying a new one would make more sense for you. The end factor though is that cars can depreciate quickly and you can always consider buying a car that is significantly ‘newer,’ just a year or two old, for a great deal. Unless you have a better financial reason for investing in a brand new car, buying a used one typically makes more sense. If you’re on the fence, always check out the available options and shop around for cars and financing.Factors to consider when buying a car
There are so many factors to consider when you’re buying a vehicle, whether it is a new car you are buying or a used car. Here are a few factors you might want to keep in mind as you’re preparing to invest in a car.1. Downpayment
It is very important to start saving for a downpayment way before you want to finance your vehicle. It will aid you in reducing your monthly payment, lowering your interest rate, and reducing your chance of being heavily in debt on your car loan. A fact that you should keep in mind is that the more expensive a vehicle you buy, the more of a downpayment you will want to have on it.2. Credit score
A credit score is extremely important when it comes to financing your choice of car. Bad credit scores can lead your bank to not give you a loan for the car at all. Say if you do manage to get the loan, there is a possibility that you won’t get the best interest rates and those will probably be reserved for borrowers who have excellent credit. Work on boosting your credit score if you want to receive the best interest rates on your loan, before going to buy your vehicle.3. Interest rate
One of the most important factors when considering investing in a car is the interest rate on it. A fair interest rate depending on the condition of the car can make a huge difference in saving thousands of dollars on it. Your best bet is to shop around and get pre-approved before you actually head out to purchase the car. This way, you won’t get stuck and be coerced into accepting a mediocre offer from the dealership.4. Cost of ownership
Each car comes with multiple expenses. This cost of ownership includes paying for insurance, gas, maintenance, etc. These expenses also differ according to what kind of car it is. For example - for luxury cars like Mercedes, the expenses are heavier than say a Fiat. If not in your budget, avoid choosing an expensive car that would add to your monthly expenses in a manner that is uncalled for.The bottom line
One of the biggest purchases in a person’s life is their car and it is extremely important to do heavy research ahead of time to make sure that the one you choose is an ideal choice of a vehicle for you, whether it is a used car or a new one. When it comes down to it, both have their own pros and cons but the most important aspect is that you choose one which fits well within your budget.