Advantages and Disadvantages of Purchasing a New Car vs. a Used Car
When it comes time to purchase a vehicle, consumers have a plethora of car options to choose from which can sometimes be overwhelming. Not only do they need to pick the make and model of the car, but also decide between purchasing a new or used vehicle. This is a big decision and can make a big difference in your finances over the next several years.
Advantages of Purchasing a New Car
For starters, one of the most significant advantages of buying a new car is that new cars come with a warranty and not all used vehicles do. Most new vehicles will have very minimal repairs in the first few years, so that gives the consumer a chance to focus only on the basic service maintenance of the car. Secondly, and probably the most obvious, the car isn’t used – no funny smells or interior stains, and no visible wear and tear. Aside from the cosmetic benefits, there is also the potential opportunity that the banks can offer to finance at a lower interest rate, which can reduce the amount of interest you pay over the life of the loan and give you a lower payment. Another advantage is that new cars now come with the latest technology, better gas mileage, and lower emissions.
Multimedia and navigation interfaces are continually evolving and improving, so if the consumers are specifically looking for a vehicle with all the latest and greatest gadgets, a new car might be the way to go. Vehicles are also becoming more fuel efficient, and even picking up some speed too. For example, the all-new 2019 Ram 1500 has recently been named the “Most Fuel Efficient Pickup Truck” in its class thanks to the option of an eTorque hybrid system. The purpose of the system is to increase fuel economy and reduce vehicle emissions, while also offering drivability benefits, as well.
Disadvantages of Purchasing a New Car
When a consumer purchases a new car, they are obligated to pay service fees and while the service fees will also be present on a used car from a dealer, they won’t be in a private sale. Depending on the carrier, a higher insurance premium could also be a likely possibility with a new car. Another disadvantage includes a higher upfront price tag and monthly payments. A consumer can obtain financing to make their purchase more economical, but it’s important to make sure that the monthly payments are budget-friendly, depending on the consumer’s preference. Moreover, rapid depreciation could also be a cause for concern. Studies have shown that within the first year after purchasing a new car, the value drops about 20 percent and approximately 15 percent each year after that.
Advantages of Purchasing a Used Car
When purchasing a used car, one of the most significant advantages is letting someone else take the depreciation hit. When buying a used car, good financing options are still available through a local bank or credit union, and because the consumer isn’t losing the money on depreciation, they may come out ahead of a zero-interest loan that they would have to take out on a new car. Moreover, for those consumers interested in buying privately, they skip out on the service fees. Another advantage is that insurance rates will be lower for a used car when compared to a new car. Like financing, insurance rates will be affected by the age of the vehicle, and a little bit of research will save you from insurance shock, no matter the car chosen.
Disadvantages of Purchasing a Used Car
Reliability is a big one when it comes to purchasing a used car. While some dealerships and websites offer a free car history report, sometimes that’s not always an option. For those techie consumers, a used car might not be the way to go as they typically don’t offer the latest technology, safety, and security features as opposed to what’s offered on a new car. Lack of warranty is another disadvantage in purchasing a used car. Unless a consumer chooses a certified pre-owned vehicle from a dealer, they won’t receive a warranty to cover whatever damage may happen to the car. Additionally, unless a consumer has a trusted mechanic to inspect the vehicle, they may not know what or if the previous owner made any necessary repairs.
All-in-all, when purchasing a new or used vehicle, research is key. Be smart and stay within a realistic budget so you don’t end up getting yourself into bigger issues in the future. At Driver’s Auto Mart, we offer the lowest prices in South Florida, free car history reports, and continuously update our used car inventory selection. Visit our location in Davie, FL and test drive one of our used cars today!