When it comes to purchasing a vehicle, you have a wide variety of choices. Not only do you have to pick the model and the color of the car, but you will also have the opportunity of choosing between investing in a new or used car.
Yes, it is possible, but it’s an important decision that can make a big difference. It’s obvious that buying a car is not an easy process. It’s true that the value of a car can depreciate over time, so it’s not an actual investment. Thus, you must be careful about how much you choose to pay for a new or used car.
What should you first think about before deciding to buy a car? You must consider the car’s cost and effectiveness. If you are doing short distances every day, you might think if it’s even worth it to buy a car? Well, in this article, we are going to talk about whether if it’s beneficial to buy a used or a new car.
First, you might want to take a look at the advantages and disadvantages of buying a new or used vehicle.
Let’s take a look at the advantages of buying a new car.
First things first, the maintenance cost for a new vehicle is less than a used car. For a new car, no maintenance is required in the first year, at least. After using the first 1,000 km, maybe you might require some servicing, but until then, you shouldn’t be worried. The number of services can vary from one company to another.
On the other hand, keeping an old car in proper function, you might have to change the engine at least 3 times/year. So, this means that there will be more expenses, such as cleaning of air filters, change the battery, and so on. Plus, if you buy a used car that it is not in a good condition, you might face difficulties sooner than you would expect.
Also, you must consider the auto parts at Partsgeek. It’s a simple and affordable way to shop for the most popular car parts.
Technologies and other advanced features
Technologies and features are something that will always win ground. But you should also consider that if something is the latest technology today, maybe in six months will be outdated. So, be careful what type of expensive car with latest advanced feature you choose now, as this might make a huge hole in your pocket later. Now, deciding to buy an old car and upgrade some of its features is still less than investing in a new vehicle. But, if you are a technology enthusiast, it might make more sense to invest in a new car.
Getting a car loan is not too difficult, for both new or old cars. But, the interest rate for a loan for a used vehicle might be huge than a loan for a ne vehicle. Let’s take a look at 2 most common disadvantages of buying a new vehicle:
If you buy a new car, you will have to pay for the registration fees, road taxes, etc. But buying a used car will give you the opportunity to not worry about such expenses.
Depreciation rate for new cars is around 20% annually. The maximum depreciation will happen in an approximative three years. Basically, when you buy a new car, the moment you step out of the dealership, it starts to depreciate. So, no matter how well you take care of your car, in a couple of years, its value will decrease by 40% at least.
In the meantime, the depreciation of a used car will depend on the maintenance or damages, which can be determined when you would decide to sell it. However, the rate of a used car is definitely lower than for a new car. If you buy an old car and take good care of it, you might sell it for almost the same price after a year, or two.
What’s more cost-effective?
Now that you’ve probably understood the advantages and disadvantages of purchasing a new or used car, let’s finally decide which option is more cost-effective.
The biggest draw-back of buying a new car is that you lose cash as soon as you start driving it. Another disadvantage is that used cars have more problems with the engines because companies tend to switch the engines or upgrade the design. With used cars, you won’t have to deal with that.
Now, the advantage of buying a new car is that it comes with a warranty, and you get to enjoy the latest technology, which means that you may find vehicles with better gas mileage and lesser emissions.
Are there any disadvantages of buying used cars? Yes, and one of them is that they’re not as reliable as new cars, as you may do more repairs on them. But you do have an option of improving your car as you like. It means that if you upgraded it accordingly and sell it after a while, you might get good money on it. However, this means that you must invest quite a lot in it, and also set aside some extra cash, to cover your back for any future repairs.
Another disadvantage? Buying a used vehicle means that you must compromise on the color. You must be flexible and patient, as you try to hunt the best car on the market.
You must decide what’s best for yourself. Regardless of what decision you make, you should make sure you can afford the vehicle. A rule of thumb is that you must afford to pay the vehicle completely in almost three years. If you can’t afford the payments, then you’re likely to drop off the idea. Buying a car that exceed your budget limit isn’t a good idea. Also, do good research before and make sure that the model you choose has excellent reviews. You might belong to those who know nothing about cars, so make sure you ask a mechanic to have a look over the car for you, especially if it’s used.