Buying New vs. Used Cars
Old Car
New vs used. Which car is right for you? Consider the following.
Owning a brand new car is exciting. But financially speaking, it makes more sense to buy a used car. As soon as you drive a new car off the lot, it loses a great portion of its value. This is because your car is no longer “newâ€.
New cars lose about 40% of their value within 3 years, then depreciation starts to slow down. Why not buy a used car and allow someone else to take that depreciation hit?
The previous owner will have absorbed the steepest part of the depreciation cycle. At that point the costs of owning and operating the car will be reduced. The money you save on depreciation will surely go a long way.
Another benefit of buying used is lower cost. By buying used you pay less. You will also save on financing costs, insurance premiums, registration and licensing fees. You don’t have to worry about paying sales tax.
New Car
As with everything else there are a few downsides to buying a used car. There are greater chances for costly unwarranted repairs. You may very soon have to do major maintenance on your car, including replacing tires, battery, brakes, muffler, and perhaps even the transmission.
A used car is usually less reliable. You don’t know exactly what you’re getting into and how the previous owner treated the car. However, every situation is different and some used models may actually be far more reliable than some new ones.
If you can pay cash, go the new car way. Enjoy the feeling of knowing you’re the original owner of a new car in mint condition. Nothing can replace that feeling.
Otherwise do not hang your hat higher than you can reach. Practice financial prudence. Save your money and comfort yourself knowing that one day you will be able to afford that dream car. One day when money is no object.
One Response for "Buying New vs. Used Cars"
Buying new cars is not an easy job. Do some homework on market values before you go shopping so you know the value of the car you’re buying and the value of your trade-in.
Buying a new car may sound good, but purchasing a used car will be a great way to save money. A new car may not be worth all that money you are planning on spending! If you are on a really tight budget, and don’t care too much about the prestige of having a brand new car, purchasing a used car might be the best option for you.
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