When it comes to cars, the decision to buy new or used is a big one. With so many factors to consider and a wide range of options available, it can be an overwhelming process. But don’t worry, this comprehensive guide will help you make the right decision for you. We’ll take an in-depth look at all the pros and cons of buying new or used cars, as well as provide expert advice on the best way to approach your purchase. Whether you’re a first-time buyer or an experienced car enthusiast, this guide will equip you with the information you need to make the best decision for you. So don’t wait any longer, let’s get started and find the perfect car for you.
Advantages of Buying New Cars
When buying a new car, you get the benefit of purchasing a car that is fully tested and has been thoroughly inspected by a manufacturer-approved mechanic. This means that you can be 100% certain that the car is in great condition and won’t break down on you anytime soon. In addition to this, buying new cars comes with an extensive warranty that covers parts and labor. This means if a part in the car fails, or any part of the car needs repainting, the car manufacturer will cover the cost of the repairs. The terms and length of each warranty vary from manufacturer to manufacturer, but on average, new cars come with a 4-year / 50,000-mile warranty.
Disadvantages of Buying New Cars
While there are many benefits associated with buying new cars, there are also some downsides to consider. The most obvious one is the cost. New cars are marked up significantly from their original retail value, so it’s likely you will have to pay more for the car than its listed MSRP. A huge thing to consider is that new cars depreciate in value, and quickly. According to LendingTree, new cars lose around 20% of their value after the first year, and 15% every year thereafter.
Advantages of Buying Used Cars
As mentioned earlier, the biggest advantage of buying used cars is the lower price tag. Used cars are marked down to a price that’s more in line with their value, so if you do your research and find a reliable source, you can get a great deal on a really nice car. Another upside is that you can choose the model, color, and features you want, so you can get exactly what you’re looking for. Another benefit of buying used cars is that you can often negotiate a lower price. Many people sell their cars privately and are eager to get the best price possible, so you can use this to your advantage.
Disadvantages of Buying Used Cars
The biggest disadvantage of buying used cars is that because it does have a history, the car could have some unexpected issues down the road (pun intended
). With the Vehicles CarFax, you will be able to see the car's history in terms of maintenance, amount of owners, wrecks, etc. You also won’t receive the same type of warranty coverage as you would with a new car, however, many used dealerships do offer warranties at an added cost. Additionally, you may have to compromise on some features or design options that you would prefer in a new car. Nevertheless, it ultimately depends on the condition of the car and its price point.
Overall, buying a used car can save you money upfront but there are always potential risks associated with pre-owned vehicles.
Key Considerations When Buying a Car
As you’re deciding whether to buy new or used cars, it’s important to keep a few key considerations in mind. First, decide what your budget is. Most of the time buyers will look at the sticker price. However, 85% of buyers in today's market are financing, and usually, the monthly payment is what buyers are trying to make sure hits their target area. Depending on certain factors, you could get a lower rate which allows you to stay in your range but affords you the luxury of getting a more expensive car.
Tips for Buying New Cars
One of the best ways to make sure you get a new car at the right price is to shop around. Visit different dealerships and compare their offers to find the best one for you. Another tip is to negotiate. Most dealers are willing to haggle on price, so if you find a car you like, try to negotiate a lower price. You can also try financing your new car through a 0% APR loan. This will allow you to make lower monthly payments, which will help you fit the cost of the car into your budget.
Tips for Buying Used Cars
Before you go out and buy a used car, make sure you have a clear idea of what you’re looking for. You can narrow your options down by choosing the make and model, as well as the features you want in your car. Another great tip for buying used cars is to shop around at multiple dealerships and private sellers. This will help you find the best deal for the car you want. You can also try out different financing options to help you save money on your car.
As you’re deciding on how to finance your new or used car purchase, you have a few different options at your disposal. You can apply for a loan through a bank or credit union, or you can use cash. If you choose to use a loan to finance your purchase, you’ll want to make sure you have a reliable source to get a good rate. Some car dealerships and websites like LendingTree let you compare rates and find the best loan for you. Last, but not least, if you ever feel like the terms of your contract are unclear or too good to be true, speak up! Don’t sign anything you don’t understand. Taking out a loan is a big commitment and you want to make sure that it works in your favor.
Tip: Avoid buy here, pay here lots if you can. They use aggressive loan tactics that might lock you into an extremely high-interest rate.
The Main Points
Make sure you know what you can afford. This not only helps dealerships fit you into the right vehicle, but will help you down the road when unexpected expenses come into play.
Shop around before making your decision. The internet is full of car dealerships, new and used, with tons of inventory.
Know your credit score and other factors before going into a dealership. You are your biggest advocate. Being educated about your financial situation allows you to make decisions in your best interest.
Whatever you choose, just go into the situation educated about your financial situation, the type of car you are looking for, and your budget. And if you ever feel like the terms of your contract are unclear or too good to be true, speak up! Don’t sign anything you don’t understand. Taking out a loan is a big commitment and you want to make sure that it works in your favor.
Good luck! And always remember – knowledge is power.