Many of us depend on a car for work and our day-to-day activities.
When it comes time to purchase a vehicle, choosing between a used model and a new one can be a daunting task.
While both options have their advantages, it’s important to fully understand what you’re getting into before making up your mind.
Here are some of the pros and cons of buying a new car compared to buying a used one.
Used Cars Depreciate Less
Perhaps the biggest disincentive for purchasing a new car is just how quickly they depreciate.
A new car typically loses somewhere around 20 percent of its value as soon as you drive it off the lot, meaning you lose out on thousands of dollars in an instant.
Because you’re unlikely to sell your car right away, it’s important to look out a few years, where new cars often perform poorly in terms of depreciation; your new car might lose half of its value in just three years.
Used cars depreciate as well, but they do so at a much slower rate.
In addition, the lower cost of used cars means you lose less money to depreciation.
Because they typically cost less than their new counterparts, used cars are generally cheaper to own and operate.
This is perhaps most noticeable when it comes to car insurance, where the lower cost of your car lets you save a significant amount of money.
If your car is older, you might choose to opt out of collision and comprehensive coverage, as a significant accident might prompt you to purchase a different vehicle instead of dealing with potentially expensive repairs.
Repairs can often be performed at a lower cost as well since parts are often cheaper for older vehicles, although this can vary dramatically between models.
Buy a Higher Class of Vehicle
Have you always wanted a luxury vehicle but didn’t want to pay the premium?
If so, purchasing a used car might be the best way to go.
Because of high depreciation, you can save a significant amount of money by purchasing a vehicle that’s just a couple of years old.
Model upgrades are often incremental in nature, and it’s often the case that vehicles don’t change at all between certain years.
If you’ve had your eye on more interior space, a better engine, or leather seats, shopping on the used market might be the way to go.
Buying New Offers More Financing Options
Although different dealerships offer different financing options, you’ll almost always have the broadest menu of options available when buying at a new car dealership.
Because the new car market is so competitive, dealerships often go out of their way to offer enticing financing options, including better interest rates.
Buying used will almost certainly save you money, but make sure to take a look at the advantages of new car financing, which can cut into this price delta.
When purchasing a used vehicle, it’s wise to take your car to a trusted mechanic to ensure it’s in decent operating condition.
When you buy new, doing so isn’t necessary. In addition, you know the brief history of your new vehicle, while there might be some surprises uncovered down the line when you purchase used.
Car dealerships go to great lengths to make the buying process as easy as possible, and you can reap these advantages when you purchase new.
Confidence in Your Purchase
When it comes to peace of mind, purchasing a new vehicle has a significant advantage.
Warranties vary between dealerships, but purchasing new will provide you with a substantial warranty in case something goes wrong with your car in the near future.
In addition, because you’re the first owner of your new vehicle, you can be confident that a previous owner hasn’t abused your car.
When it comes to confidence, the extra costs might be worthwhile to some buyers.
Buying the right car means choosing your priorities and finding out what’s most important to you.
This is also true when it comes to deciding between purchasing new versus used.
Before settling on one option, make sure to consider the advantages and drawbacks of each: You might be surprised at which option is best for your needs.