If you are ready to buy your next car, you will have to think about whether you want a new car, or a used one. There are pros and cons to both sides, so you do have to take all of those into consideration. In order to help you make a decision in terms of which one to buy, and whether you need used or new car loans, the following may be beneficial.
If you are thinking about the price of a vehicle alone, then buying a used car is obviously going to be the better option. As soon as you purchase a car new, it depreciates, and continues to drop steeply for three years. This means that, if you buy a new car, you will lose a lot of its value and never get that back. Besides the fact that new cars depreciate, you may also have to pay for things such as shipping costs, import fees, taxes, and customization costs. None of these can be passed on if you sell your vehicle, meaning you will be out of pocket.
Warranty and Maintenance
If your main focus is on warranty and maintenance, then a new vehicle will usually be the best option. You tend to get a good manufacturer’s warranty on a new car, covering you for between one and five years. Plus, with the exception of recalls, you shouldn’t have any mechanical problems or repairs to content with. However, you could choose to purchase a ‘certified used car’ as well. These are usually ex-lease vehicles and they have been inspected very thoroughly before receiving a new warranty from the manufacturer. This means that you still have good protection. Also, it is possible to purchase a used car that is still under manufacturer’s warranty.
If you purchase a used car, it is unlikely that you can have it customized in any way. When you buy a new car, by contrast, you can choose things such as interior and exterior color, features, and other options. However, there are mechanics out there that are happy to customize used vehicles for you as well. They can airbrush your name on the car, change the exterior color, add some new electronics, and more. On the other hand, these will not be done by the manufacturer, so you run the risk of them not looking as good.
Used cars, as stated, tend to be cheaper than new cars. However, to attract buyers to new vehicles, manufacturers often offer zero percent financing options. This means that you can get a car loan without having to pay any interest on it for a set amount of years, usually four. In so doing, manufacturers have significantly undercut the used car model. Whether you buy a new or a used car, you can pay for it in full, or you can decide to finance it through a dealership or bank. Inevitably, finance for used cars carries a significant interest rate with it, meaning you pay more over time. You must work out, therefore, whether your total price is actually more than that of a new car.
So, there are things to be said for both new and used cars. Only you can decide which option is better for you.