So you’ve decided that it’s time to replace your car, or even buy your first vehicle. One of the biggest questions you face is whether you should purchase a new car or a used one.
Consider these few important questions to
ask when determining whether to buy new vs. used cars.
New or Used: Which One Is Better For You?
New vs. Used Cars
There are important factors to remember when making your decision. The reasons for making the choices you make are going to be unique to you. For one person, a new car may be ideal. For another, a used car may be the best or even the only option. Never think of a new car as an investment—the value of your vehicle depreciates rapidly and becomes something of a holding cost of keeping your car, in addition to maintenance and repairs.
Do You Have a Trade-In or Down Payment?
When you’re looking to buy a car, the amount you can put down is going to play a major factor in what you can buy. If you’ve got stellar credit, you may be able to get a car entirely on financing, using incentives like rebates, cash back and discounts in lieu of a trade-in or down payment.
Used cars, on the other hand, may require money down or an equity trade-in to get behind the wheel. Some dealers, however, are able to offer a lot of financing options for less-than-stellar credit which can enable you to get behind the wheel without a lot of money down.
New Car Depreciation
New cars depreciate faster than used ones. In fact, the moment you drive off the lot, your car is worth up to 30 percent less than it was when you signed the papers. It may not seem fair, but it’s a fact of life. Do you need to take that hit, or should you buy a gently used car that’s, say, 2 or 3 years old and has already taken that value drop?
Used Car Costs
Used cars often cost a lot more to maintain. You won’t have the benefits of a manufacturer’s warranty (or at least, you’ll have lesser benefits depending on the car’s age). You’ll have to pay for maintenance out of pocket. Can you afford these maintenance costs against the potentially lower monthly payment?
In addition, there’s a cost in time for used cars. As vehicles age they will inevitably spend more time in the shop for repairs. Can you afford to deal with that time? It might just be a day here and a day there, but if your transmission goes bad, you could be looking at over a week in the shop.
There are benefits and drawbacks to both new and used cars. The first step is to find out how much for which you can get financed. Read a bit about auto loan types, and get in touch with us for more information on buying your new car today.