New or Used Car: Should I Buy a New Car or a Used Car? |
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Peter Nisbet
February 9, 2013
Is a new or used car your best choice when buying a car? Should you buy a new car or a used car, and what is the difference? This first answer is to purchase what you feel best for yourself, since many people would never buy a used car on principle, and others feel the same way about used cars.
However, if you have an open mind on the matter then the question of new or used car can be discussed rationally. If you are unsure whether you should buy a new car or a used car, here are some factors that you may want to take into consideration.
Benefits of Buying a New Car
a) There is little more satisfactory than having a gleaming brand new car delivered to your home. You are that vehicle's first owner - and the neighbors cannot miss it!
b) You will have next to nothing to pay for maintenance for the initial few thousand miles. You can be sure that your exhaust, brakes and tires will be in top condition and not fail on you with an hour of sitting in the driver seat.
c) Any problems that do arise will be covered by your warranty, and your deal will likely include a few regular maintenance checks thrown in. If not, then your negotiating skills need honed!
d) Your warranty should last a minimum of three years. If anything goes wrong during that period it is the up to the manufacturer and dealer to fix it between them. Keep in mind that the wording of warranties can never overrule the general protection you have with respect to the vehicle being fit for purpose (so-called lemon laws) - so you are covered two ways. Lemon laws do not apply to pre-owned cars.
e) When you purchase a new car you can choose your options - color, trim and so on, and also your extras in terms of gadgets and other enhancements. With a used car you get what you get.
f) Buying a new car enables you to more easily to keep owning new cars. The trade-in price after 2-3 years is high enough to enable you to put a good deposit down on another new car and continue paying your finance without much extra added on.
Disadvantages of a New Car
a) You lose a good proportion of equity as soon as you turn the key! Your new car will lose at least 12% of its value in the first year, and probably more if your mileage is high.
b) Insurance will be higher for a new car than for a used car of the same model. This could be a significant expense.
New or Used Car: Advantages of a Used Car
A lot depends on the age of your used car and on its mileage. The resale price of a car drops with each year of its age, although mileage is also a significant factor. A three year old car previously owned by a pastor is likely to be in better shape than a two year old car driven by a mad traveling salesman! Here are some other factors:
• If you can purchase a used car from a certified pre-owned program, then you are buying a car in an almost new condition. It has been properly serviced, and any problems resolved being sold. Often associated with late-model luxury cars, they typically include an extended warranty and beneficial financing options.
• Because of the rapid drop in equity of new cars, the new car or a used car debate swings heavily towards the used car for those with limited funds. There is no doubt that you get more car for your cash when you buy a pre-owned car. You can buy a good gadget-filled used SUV for the price of a new small 2-door car.
Disadvantages of Buying a Pre-owned Car
• You must know what you are buying, because lemon laws do not apply to used cars. Take a good mechanic with you when you inspect a used vehicle of any type, and buy with your head, not with your eyes.
• Be prepared to pay for necessary maintenance and repairs during your first year of ownership. Make sure you have some form of seller's warranty, although they can be difficult to enforce if you purchase from an individual, which brings us to. . .
• Always buy a pre-owned car from a dealer who will offer you a warranty. This at least offers you some kind of security against everything falling apart on your first outing with the vehicle. Most people selling cars do so in good faith, but second-hand cars didn't get their name for nothing.
So - New or Used Car?
Whether you should buy a new car or a used car is nobody's decision but your own. If you are unsure, think of what you need from your car and how much money you have. If your budget is tight, then you can get more car for your money buying used. If not, then buying new might appear to be the best choice. The choice is yours, but make sure you get the best deal you can, whatever you select - a new or used car.