Buying a car might not be an investment when it comes to financial value, but it definitely is when it comes to practicality. But what is the best choice: buying a used or new car?
When you’re in the market for a new car, you have a lot of choices to make before buying one. There are plenty of options available to you and it’s important to know what you want before jumping into the ocean of alternatives.
You’ll have to decide the make and model of your preferred car, do you want a BMW electric car, or maybe a Range Rover? But more importantly – are you entering the market for used cars or brand new ones? The reason that this decision is so important is that it will affect your finances over the next several years.
Your choices also depend on what you can afford, how much are you able and willing to spend on a car. For those of us who don’t have a full savings account or other kinds of money laying around, our options will be determined on whether or not we qualify for a loan. Make sure you have your financing in order before you start looking for a car.
Upsides and Downsides to a New Car
One of the biggest advantages of going for a new car is that the car often comes with a warranty and that the car usually requires few repairs during the first years of using it. Therefore, you can use time and money on maintenance instead to keep the value from dropping even more.
New cars also have the latest technology so it’s easier to find cars with benefits like lower emissions and good gas mileage, among other things. They are also better when it comes to technical features like playing music from your phone and navigations systems. The new Tesla can even park by itself, and pick you up outside a mall when you’re done shopping.
You often hear that you lose money as soon as you drive a new car out of the dealership. New cars take their biggest depreciation in the first couple of years – this might be the biggest disadvantage of buying a brand new car.
Also, if you buy a new model of a car you could become kind of a test subject – during the first year, the manufacturer might switch engines or do alterations to the design which might result in problems for the buyer later.
Upsides and Downsides to a Used Car
Logically, the most important advantage of going for a used car is that someone else will have taken the biggest depreciation hit on the car like explained earlier. This means that if you’re good at maintaining your car you might be able to sell it for approximately the same amount that you bought it for.
It’s also great that a lot of other people has tested out the model and might have shared their experience with the car online so that you can do proper research and be fully informed before you make a choice of model. The insurance rates might also be lower on a pre-owned car than on a brand new one, which can save you some money.
Of course, an older car may need more repairs and might not be as reliable as a new one, but technology has improved and made cars more reliable and many cars can go without repairs for nearly 10 years.
When you buy a pre-owned car you might also have to let some of your preferences go, for example when it comes to color and interior, mileage and the car’s general history.
Generally, you have to be more flexible and patient when looking for a used car, which is why many people would rather buy a new one.