Pros and Cons of buying a new or used car
Having a car might be expensive, but it definitely pays off, so more and more millennials are starting to buy their own car. And this is when you start wondering if you should buy a new car or a used one. There are pros and cons on each side, but you need to discover them before you invest in a vehicle, to be able to get the most value for your money.
Buying your first car is a big event, especially since you’ve probably saved money for some time. Even if you have to sell an old car for money in order to buy a new one, you need to research the benefits of both a new and old car. The main problem with a car is depreciation.
When you buy a new car it will lose 20% of its value as soon as you take it on the road. This is called depreciation. After one year of usage, the car loses even more of its value. By the time you get to sell it, the value of the car will be a lot lower than the amount you paid on it.
By comparison, when you buy a used car you will pay a lower amount for it, due to depreciation. When you will sell it, the depreciation will cost you less.
Reliability and maintenance
Used cars carry a stigma when it comes to reliability and maintenance costs. While it is true than a poorly maintained car is not reliable, if you find a car in good condition, you will never have to deal with frequent service visits. Most cars are built to stay in good shape for the first 100,000 miles, so make sure you know the real mileage of the car. Maintenance tasks are scheduled at fixed mileage, so you can buy the used car based on the mileage and when the next major maintenance is due, to avoid the most expensive maintenance tasks.
Another advantage of buying a new car is that you can look for cars in the luxury class, due to depreciation. In most cases, registry renewals are cheaper for old cars, which can also be an advantage. And when it comes to minor traffic incidents, you won’t have to put up with the stress of scratching your new car.
However, insurance costs might be higher, depending on the regulations in your state. The reason for this can be the age of the car and the amount of pollution it releases into the air. With a new car, this is not going to be an issue.
A huge advantage of buying a new car is the fact you have a lot of financing options, from car loans to discounts. New cars also come with a lot of new gadgets and technologies, which might be a huge advantage on the long term.
Bottom all, you need to balance the benefits and drawbacks of buying new vs. old, and then make the decision. Depending on your budget, current situation and other personal criteria, you will choose if a new car is the best option for you or if buying used is more affordable at the present time.