Buy a New or Used Car

Buy a New or Used Car: Which One Should You Choose?

There are numerous options available to you when it comes to buying a car. You not just get to pick the right model but also decide whether to buy a used or new car. It is an important decision, as it can make a huge difference in your finances over the years.

Both used and new cars come with their share of pros and cons. Let’s find out to help you make the right decision.

Pros of a New Car

The benefit of purchasing a new car is that it comes with a warranty. The car dealers may also offer you a good deal at a lower interest rate. Another major benefit of a new car is it comes integrated with the latest technology and better mileage and lesser emissions.

Cons of a New Car

The major downside of purchasing a new car is that it takes a huge depreciation in the first few years. This means you will be spending a lot of money and never be able to get it back. Furthermore, buying a new car doesn’t make sense unless you have extra money that you don’t mind spending.

Pros of a Used Car

The major advantage of purchasing a used car is that someone else bears its huge depreciation, not you. You can further sell the car in the next few years for nearly a similar amount you’ve paid for it. Since you have not lost any money on depreciation, you can come out ahead with zero interest that you would generally take on a new vehicle. Furthermore, it’s easier to save money and buy a used car. You may even check online reviews about which car model is performing well. Another advantage is that used cars have lower interest rates than the new ones.

Cons of a Used Car

The major disadvantage of purchasing a used car is that you may need to spend money on its repairs and it may not be as reliable as a new car. You can only purchase a car that is three to five years old, which means you cannot enjoy the latest car technology. Another disadvantage of investing in a used vehicle is that you even have to compromise on its color to get the one with better mileage and history.

Making the Decision

The best option is to decide what suits you the best as per your financial situation. As the rule of thumb, you must be able to pay off for the car in the next three years. If you cannot do so, you cannot afford it for some time. Always do your research to ensure that the car model you choose is reliable and has good reviews. If you don’t have much knowledge about a car, consult a car mechanic, especially when buying a used car.