Should you buy a new or used car? Not only do you need to decide the make and model of your car, you also need to decide if you want to buy a new or used car and whether you will qualify for a loan or if paying cash is a better option. This is an important decision that can make a big difference in your finances over the next few years.
Most new cars will need very few repairs in the first few years, which leaves you to focus on the regular maintenance of the car. New cars also come with a manufacturer warranty which comes in handy when major repairs are needed.
A new car will also have newer tech and safety features as well as better gas mileage and lower emissions, and you know for a fact that the car you are buying has no history of accidents or mechanical issues.
A big disadvantage of buying a new car is depreciation. The car loses value in the first few years, taking it's biggest hit the moment you drive it off the lot.
The newer the car, the higher the sales price, which means higher sales tax too, so be sure to consider the overall costs that will follow in the next few years. Having a good down payment available will help avoid you owing more to the lender than what the car is worth.
The greatest advantage of buying a used car is that the original owner will have taken the costly depreciation that occurs in the first few years of ownership. You might even be able to sell your car for nearly the same amount in the next few years. Buying used can sometimes give you the opportunity to pay cash and save hundreds of dollars! And because it is a used car, you have the advantage of researching how that specific make and model has performed and what issues you might expect to have.
Buying a used car can also save you a whole lot on your insurance if you have a young driver in the household.
A disadvantage of buying a used car is that you take on a risk of possible mechanical issues. A used car may not be as reliable as a new car and may soon need to have repairs done, so it is important to set aside money for these unexpected repairs. (Tips for buying used cars)
You also have the option to shop for a certified pre-owned car. These cars are checked out extensively by the dealer and usually come with some type of warranty.
When buying a used car, you may have to compromise on a specific color or feature in order to get a car that is in better condition. The search for a used car will be extensive and will require more time and effort in order to find the best bang for your buck!
BEFORE YOU BUY
The best option is the one that works best for you. Do your research, grab your calculator to decide which option will be the most beneficial for you and your pocket. And before you buy that car, CALL YOUR INSURANCE AGENT to see what the cost for insurance will be! Need a quote? Request a free quote here or contact us at 281-377-8309.