If you’re considering buying a vehicle and aren’t sure whether to buy a new or used one, first you need to weight in the disadvantages and advantages of both. You can go to a major bank’s website where it has an online calculator that you can use to figure out how much you would pay from a used car versus a new one. But here are a few advantages and disadvantages of new and used cars.
Used Car Advantages
- A car takes the biggest depreciation hit the first two years of owing it. If you opt for a used car, you may be able to enjoy a relatively new, low-mileage vehicle for a fraction of the price of a new car.
- All those extra options such as navigation systems and sports packages can really put the price of a new car over the top. If you choose a slightly used car, you may be able to include extras that may put a new car out of your price range.
- Many manufacturers “certify” their vehicles after putting them through an exhaustive inspection and repair process. They often come with the original manufacturer warranty that offers used car buyers extra peace of mind.
- There is a wide range of models, brands and colors available for the purchaser to buy a used car.
Used Car Disadvantages
- The interest rate on the purchase of the car matters a lot. In the case of buying a used car, the interest rates are a bit higher than on a new car as it involves more risk for the lender while giving loans on used cars.
- There is no guarantee or assurance offered to the purchaser when buying a used car as to whether the car is in good condition or with the right mileage.
- There is no guarantee that the car is maintained properly and is free from any kind of accidents.
- There may be problems in the engine of the car or with the transmission which can be far from the sight of the purchaser of the used car.
- Sometimes the purchaser may end up spending more money on the maintenance of the used car than he would have spent on a brand new car. In such cases the purchaser loses his peace of mind with the never ending problems caused by the car.
- No lease option on used cars. Most dealerships offer leasing on new vehicles only.
New Car Advantages
- Buying a new car means you can enjoy some of the newest safety features and the latest technology.
- Financing is generally less expensive for new cars.
- Lease option is available on new cars.
- It comes with warranty for 2-4 years so don’t have to pay for repairs.
New Car Disadvantages
- A new car will sometimes usually cost you more money than a used car will.
- Warranty will expire after 2-3 years, you will have to pay for repair and maintenance.
- The care instantly depreciates and is not worth what you paid for it once you sign the paper and drive it off the lot.
- Your payments are probably high especially in comparison to the same vehicle that may be a year or two old.
Whether you decide to buy a new or used car, you should always research the vehicle extensively. That includes checking insurance rates, as well as license and registration costs. Here are a few things you should consider when buying a new or used car:
- Interest rate
- Number of months until payoff
- Number of years you anticipate owning the vehicle
- How much you expect to pay in monthly insurance and maintenance costs
- Registration costs
- Purchase price
- Age of vehicle
- NADA Car Value Guide – Use the NADA guides to find and compare the values of new and used cars.
We hope this will help you in determine whether a used or a new car is the right choice for you.