back to articles | March 31, 2020 | Patrick Peterson
Categories:   Tips & Insights For Car Buying    Auto Loans & Financing    Buying & Selling Cars    Consumer Credit    Loan Calculators & Rates    Types of Car Loans    Vehicle & Buying Research    The myAutoloan Difference
Car Buyer's Guide: Should I Buy a New or Used Car?
When buying a car, the decision revolves around new or used. They each have their own advantages. You have to plow through the options to figure out what works best for you.
There have been countless debates on whether buying a new car is better than buying a used one. While there's nothing quite like the smell of a new car and the bragging rights that come with it, a used car carries its fair share of advantages. If you're planning to buy a car and can't decide whether to buy used or new, read on. This article aims to help you make a wise purchasing decision based on factors surrounding your current situation.
Watch Out For Depreciation
Depreciation is a car buyer's worst nightmare. You've probably heard about the term before, and that it sucks about 20% from your new car's value the minute you buy it. Yes, depreciation is deadly: a $25,000 car will lose $5,000 in the blink of an eye, regardless of how near or far you drove. By year's end, depreciation would've claimed 30% of your new car's value because of wear and tear and mileage. Used vehicles depreciate less over time.
Make Your Purchase Based on Facts and Logic
Buying a car is one of those big-ticket items in life that many pundits argue about all the time. You'll come across people saying that buying a new car is better and second-hand aficionados who'll tell you their way is best, maybe even offer you a guide on buying a used car. While outside influences (people's opinions, research) may affect what type of car you buy, the decision ultimately falls on what you want and what your budget looks like.
What you need to do is filter out all the noise, look at the facts, keep your emotions in check, and let logic take over your purchase decision. Let's say you want to buy a new car. Do the math and ask yourself how you can pay the down payment or financing. If you're having trouble coming up with an answer, you probably can't afford it, and buying used is a better option. Also, there are several options to finance buying a used car. You can apply for a used auto loan to cover the expenses. You should also determine what you want out of a car, and how happy you are driving it.
Buying a New Car VS a Used Car
Both new and used cars have their advantages. Let's take a quick look at each one.
Advantages of Buying a New Car:
New cars are generally more reliable than their used counterparts, giving you peace of mind that the vehicle won't break down while you're on the road. There's also the assurance of knowing that the car is under warranty for a set period (3-10 years, depending on the manufacturer), and the dealership will fix it or replace certain parts for free.
You'll Have the Latest Tech
If you want to drive cars with the latest technology, then the newest models give you a combination of performance, fuel economy, safety, comfort, and entertainment. You'll have to wait a few years to get the same tech in most used cars, but there are some exceptions.
More Payment Options and Incentives
Car dealerships and automakers offer plenty of financing options for new cars. They usually have lower interest rates on new car loans, cash rebates, and other incentives for new car buyers. This can lead to thousands of dollars in savings versus the steep sticker price if you negotiate well.
Shopping for a New Car Is Less Stressful
When buying anything used, whether it's an electronic device, a house or a car, there are always going to be nagging questions about how the previous owners used it and if there are any lingering problems. This never happens when buying a new car. You don't need to stress about hiring a mechanic to inspect the vehicle or have the critical systems repaired immediately after buying it. Plus, there's less legwork of visiting numerous used car lots and private sellers. It's also easier to find out how much you need to pay for a new car.
You don't hear too many people bragging about their used car unless they got a deal for a rare supercar or a hard to find vintage.
Advantages of Buying a Used Car:
More Reliable Than Ever
Modern cars are more dependable than models made twenty years ago. There are plenty of older models still in use today, and some cars can even surpass the 100,000-mile mark before needing a major repair job.
Today's cars still need regular maintenance, but you can drive them longer between their scheduled PMS.
Lower Insurance and Registry Renewals
Used cars cost less, and therefore cheaper to insure for collision and comprehensive insurance. The registration costs for used vehicles also go down every year.
You can Get a Top-of-The-Line or Luxury Model
Because you're saving money on depreciation, you can buy a range-topping model with all the toys and tech. You can even spring for that luxury car you've always dreamed of driving.