Buying a new car can be a daunting experience. You want to make sure you buy the best one for the price. One decision you will need to make is whether you purchase a new car or a used car. Here are 5 things to consider when choosing between a new or used car.
1. The Cost of Repairs to a Used Car
Remember that used cars will have some mileage on them. The warranties on a used car are much better, so it is unlikely that you will be paying huge expenses on the vehicle within the first few years. A used car might have been taken care of by the previous owner. However, any car will high mileage on it is likely to need repairing. In addition, the parts for a used car will be more out of date, so they will be more expensive than the parts for a new car.
If the used car is still like new and few miles on it, you it still could have some warranty perks. You can find some certified pre-owned cars that have some limited warranties. The bottom line is that most used cars will need a mechanic sooner than used cars. Check the warranties.
2. Used Cars are Cheaper
In some cases, new cars might be above your budget. In fact, the cost of a new car could be more than twice the cost of a used car. This cost includes the purchase price and interest. It does not include the cost of maintenance, repairs, or car insurance. If you desperately need a car but cannot afford the price of a new car, you can get a used car for much cheaper.
3. A Used Car does not Depreciate in Value Much
With a used car, you can sell it for almost as much as the price you paid for the vehicle. If you wish to sell it in a couple of years, you can find a good loan with low rates, and you have not lost any money. The Huffington Post says that new cars begin depreciating right after you drive it off the lot.
4. You will have Better Safety Features with a New Car
Forbes states that a “newer version of the same model and make may come with one or more desired features, especially the latest high-tech safety systems and smartphones connectivity features-a used version lacks.” You can customize the car to include whatever you want. You do not have as many choices with a used vehicle. Each year, car companies are coming up with new safety features to keep you safe. New cars might be better equipped to protect you if you are in an accident.
5. Interest Rates are Lower for a New Car
Lenders offer lower interest rates if you by a new car. On a new car, it is easier to know the resale value of the vehicle. If a borrower defaults on the loan and a lender needs to repossess the vehicle, they will know over time how much the car has depreciated. With a used car, you do not know how much mechanical issues it might have. In addition, in many cases, people who buy a used car has a lower credit score. Therefore, lenders consider it riskier to give them an auto loan, so they increase the interest rate.
Before you buy a car, make sure you know the advantages and disadvantages of buying a new or used car. Whatever vehicle you choose, make sure you can afford the monthly payments. New cars look good and have extra features, but you want to make sure you can pay for it. Make sure you know all the options, and then you can make an informed decision.