When it comes to buying a car, there are a huge plethora of choices available in the market. So, not only do car buyers need to pick the model and make of the car, but they also need to decide if they want to buy a used car or a new one. This decision is imperative because it could end up making a huge difference to their finances over the next many years.
So, what are the advantages and disadvantages of a new car over a used one and vice versa?
1. Advantages of a used car
Buyers of used cars get to avoid the biggest disadvantage of a new car – depreciation, for which someone else takes a hit. Buyers of used cars could possibly sell their car for almost the same amount they paid for it in just a few years. They can even get good financing options via credit unions or local banks, and since they aren’t losing money on depreciation, they could even end up a deal better than a zero-interest loan for a new car. Also, buying a used car is easier in terms of paying cash which one has saved up. Last but not the least, the insurance rates of used cars, depending on the model and make that you’re looking into, are lower as compared to new ones. Younger buyers particularly could end up saving a lot as they tend to pay more insurance due to their age.
2. Disadvantages of a used car
Reliability is the biggest issue with buying a used car. That being said, buying certified pre-owned cars via many different car companies is one way of solving the problem. Secondly, buying used cars could mean compromising on the color choice of the car for getting one which has better mileage and history. Buyers of used cars need to be more patient and flexible while hunting for a car of their choice.
3. Advantages of a new car
There are several advantages to buying a new car. The first is the fact that new cars come with warranties. Also, as owners of new cars, people will have to focus only on maintenance for the first few years since most new cars tend to require very few repairs during that time. What’s more, dealers could also end up offering financing at lower interest rates, reducing the interest amount one pays over the time period of the loan. The latest technology is another huge advantage, especially for car gadget aficionados, better gas mileages result in lower emissions too. New cars also bring with them better connectivity to other electronic devices such as smartphones, tabs, and more.
4. Disadvantages of a new car
The biggest disadvantage of a new car is depreciation, which is at its highest in the first two to three years of the car being bought. So, buying a new car doesn’t make sense financially for someone unless they have a lot of money simply lying around. Another con of new cars is that brand-new models often get model, design, and engine updates later on, to fix issues with the original model.