When it comes to buying a new car, there are many options available, ranging from the manufacturer and model to making the decision whether to buy a used vehicle or a new one. The choice you make could depend on your available capital, whether or not you’re qualified to obtain a loan, or if you’d be paying in cash.
Therefore, it’s imperative to make the right choice, because it’s one you’ll have to live for a considerable amount of time. It’s also important to note that purchasing a car is considered more of a liability, rather than an investment.
Benefits of purchasing a new car against a used car
Buying a new car comes with the advantage of obtaining a warranty. This will allow you to fully focus on the maintenance of your car, rather than spending money on repairs. If you’ve obtained a loan for the car, the dealer may offer you a reduction on the amount of interest which you’d have to pay over the repayment period.
New cars are often equipped with the latest technologies. You’ll have the opportunity to purchase a car which consumes lesser gas and produces fewer emissions. New cars also include features for connecting to certain devices and thus provide greater convenience.
New cars experience their highest level of depreciation within the first two or three years. This means you’ll begin to lose money immediately on driving the vehicle out of the lot. It therefore doesn’t make much sense to purchase a new car if you intend to save yourself from such losses.
Buying a brand new model also has an added disadvantage; the car company will likely release a newer model with a different engine or alter the general design of the car, within just a few years. Manufacturing such an upgrade means that there might be some faults recognised in the model that you have purchased.
Advantages of purchasing a used car against a new car
The main advantage of purchasing a used car is that someone else will have taken the biggest depreciation ‘hit’ on that vehicle. You might also be able to sell the car for almost the amount at which you bought it. Furthermore, as you wouldn’t be losing any money on depreciation, this means that you may come out ahead of a zero interest loan.
You can conduct research and potentially find favourable reviews of the model in question before you go ahead to buy. It’s also easier to save up and pay in cash.
Your insurance rates would also be lower for a used car, providing even more savings.
Disadvantages of purchasing a used car
The first disadvantage of purchasing a used car is that you might have to spend more on repairs. However, certain companies provide the option of purchasing a certified pre-owned car.
Another disadvantage is that while obtaining a car with a better mileage and history is more important, you’ll likely have to compromise on the colour and do any painting yourself later on.
Basic advice
Whichever choice you make, research thoroughly and ensure the car you decide to purchase has enjoyed numerous positive reviews. You can also ask a mechanic to look over your chosen vehicle if you happen to know very little about cars. Certain companies, such as VinCheckPro, can provide all the tools and information you need, as well as free VIN check to determine that the car ‘checks out’ before you make any purchase.
Also, ensure you’ll be able to fully pay off the car within a period of three years. Look to secure the best deal possible if you intend to obtain a loan. Or check out https://www.moneyexpert.com/car-finance/ to find the best car financing solutions.
