Cruising along an open road in a brand new car is a huge part of the American dream. However, it can also be a huge part of the American nightmare of never-ending debt. One way to get around this is to learn to be happy cruising along an open road, carefree, in a brand new to you car. Still though, there are caveats to consider there as well.
So what’s better, Buying a new Car or a used one?
“Let’s take a look at the pros and cons of buying new vs. used cars”
New Car Positives
Something about being the first owner of a car is really special. They’re so fresh. The smell is wonderful (to most people) and everything is clean.
What’s more, you can motor along completely worry-free because the manufacturer will fix it if anything goes wrong — for free. Many new cars also come with scheduled maintenance included as part of the purchase price, so all you have to worry about is gas, insurance, registration and your monthly payments.
Financing new cars is actually cheaper in terms of the interest rate you’ll pay and they are bristling with the latest technology. Rear view cameras, smart cruise control, self-parking — some will even bring themselves out of the garage for you in the morning when you’re ready to go to work. In most cases, auto loans with bad credit are easier to get with a new car too.
New Car Negatives
Higher monthly payments and more costly insurance premiums lead the list of downsides to a new car. You’ll also endure a rather significant depreciation hit as soon as you drive the car off the lot. Sales tax, which is tied to the purchase price, is higher than with a used car and your registration fees will be more expensive each year as well.
Another factor to consider is where your car falls in the model’s run. If it’s the first year of production, issues with the design may have yet to have revealed themselves and been corrected. This means you’ll be looking at recalls as fixes are put into place. If you’re planning to keep the car long term, some problems may surface after the warranty expires and you’ll pay to put them right on your own.
Used Car Positives
The second owner discount can be a considerable financial advantage. In most cases a one-year old used car costs 20 percent less than its brand-new counterpart. If you go with a certified pre-owned used car from a dealer, you’ll get warranty protection besides.
That lower price also means less sales tax, lower registration fees and a more affordable insurance policy. Another advantage of that lower price is even if you take out a loan to buy the Car, the likelihood of owing more than the car is worth at any point during the life of the loan is significantly less.
Used Car Negatives
You don’t really know how well the car was maintained, or whether or not it has been involved in a serious accident. Yes, services like CarFax can give you an idea, but those databases depend upon incidents being reported. Thus, they aren’t 100 percent reliable. You can buy extended warranties to protect against the unexpected — but warranties come free with Buying Your Next Family Car new cars.
All things being equal, interest rates tend to be higher on used car purchases, regardless of your credit history. Therefore the best way to get into a used car and really see the savings is pay cash. If you can’t, you’ll pay a bit more for your loan.
Ultimately when it comes to the Pros and Cons of buying new vs. used cars, you’ll pay less to drive a used car, but you’ll have more things to consider.
Which way to go depends entirely upon your propensity to tolerate risks. You’ll pay more for the new car with fewer concerns, but you’ll pay less for the used car if you’re willing to contend with what might or might not occur.