If you want to buy a vehicle, you need to decide if you wish to purchase a new car or a used one. The question doesn’t have an easy answer. Both have pros and cons that people view differently. That’s why we created this article to help you understand the differences between used and new car ownership to make an informed decision.
Pros To Buying a New Car
The pros to buying a new car vary somewhat from person to person. We’ve listed some of the more common advantages that come with this decision.
Lower Maintenance Costs – Today’s cars are engineered better than ever before. New vehicles run better, longer than a car that may be 3-5 years old. Fewer breakdowns equate to lower maintenance costs.
Warranty – Manufacturers offer vehicle warranties covering various parts of the car, from the powertrain to complete bumper-to-bumper coverage. These warranties vary in both years and miles driven, but you can drive off the lot with confidence knowing your new purchase has the manufacturer’s backing should anything break down.
That New Car Smell – Nowadays, you can buy air fresheners with the new car scent, but that doesn’t quite capture this pro. When you buy a new vehicle, you get to enjoy a brand new vehicle. Everything works perfectly, and you get the joy of owning a new car. No matter how well somebody maintained a vehicle, it has wear and tear. The seats may be a little worn, or the carpet might have a stain. Minor imperfections in used cars aren’t there in a new one.
New Technology – Modern technology has elevated the driving experience in most new cars, and it continues to add new features year after year. Buying a new vehicle allows you to experience the latest in-vehicle tech you won’t find on a used car.
Easier To Buy – Manufacturers and dealerships constantly offer special pricing and interest rates on new cars to entice people to buy. You can get anything from zero interest to no payments for six months just to buy a new car. Some dealerships throw in free services like oil changes and tire rotations for the life of the vehicle.
Pros To Buying a Used Car
You Save Money – Let’s face it. Buying a used car can save you thousands of dollars in the sticker price. If you finance, that translates to a much lower monthly payment. In some cases, you can save hundreds of dollars in monthly payments alone.
Used Cars Depreciate Slower – A 3-to-5-year-old car has already undergone the most precipitous depreciation. Because of this fact, a used car holds its value longer than a new vehicle. If you decide to sell a used car in a few years, you’ll have more equity built up than you would with a new car.
Lower Insurance Premiums – Your used car costs less to replace should it become damaged or stolen. Therefore, the cost to insure it lowers.
Cons To Buying a New Car
Financial Commitment – Buying a new car costs more than buying used, sometimes tens of thousands more. Most people finance the purchase of a vehicle. The terms of the loan on a new car typically run between 5-6 years. That’s a long time to be paying for a vehicle, so you need to be confident your budget can handle the commitment.
Depreciation – New cars depreciate quickly, as much as 30% in the first few years. That drop in value could land you upside down on your loan if you decide to sell or trade the vehicle.
Insurance Premiums – It costs more to insure a new vehicle, especially when you finance. Lenders want protection against theft or damage and will require comprehensive coverage and gap coverage. You could end up spending $100 or more each month in insurance premiums.
Cons To Buying a Used Car
Increased Maintenance Costs – Older cars have more wear and tear on them, so the likelihood that they will break down increases. Depending on the age of the vehicle, you could end up spending a few thousand dollars every year on repairs. If you don’t have that kind of money in reserve, you may want to consider buying a new car.
Less Warranty Coverage – Most dealerships will transfer existing warranties to the people buying used cars from them. Warranty coverage varies depending on the age and mileage of the vehicle. A 50,000-mile powertrain warranty on a three-year-old vehicle driven 15,000 miles per year will only have 5,000 miles remaining on it. You can protect yourself by purchasing extended warranties from the dealer, but not always.
More Time In the Shop – A used car breaks down more often. Thus, it spends more time in the shop getting repaired. Can you live without a car for days at a time while your mechanic fixes the latest transmission malfunction?
Things To Consider
A good tip would be to calculate what you can afford before you shop. A careful review of your budget will reveal what you can absorb in a monthly payment. Don’t forget to calculate fuel costs and insurance premiums. Another piece of good advice would be to create a list of those features you need and want and those you don’t care about.
This list will help you avoid buying a car and paying for features you don’t need or won’t use. A four-wheel-drive truck costs thousands of dollars more than a two-wheel-drive truck. But if you never take the truck off-road, why pay the extra money?
It would help if you shopped around for car loans before shopping for a car. At Rydell Outlet Center, we can get you pre-approved for a car loan before shopping for a vehicle. Pre-approval will help keep you focused on those vehicles you can afford and prevent you from over-reaching financially.
Contact Rydell Outlet in Grand Forks
Ultimately, the decision to buy new or used comes down to your particular needs and budget. You can save quite a bit of money buying a used car from Rydell Outlet Center. If you don’t have the budget for a new car payment, we can find a deal that works for you. You can contact us online with any questions. Our team will work to get you the right car at the right price.
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