Pros and Cons of Buying a New vs Second Hand Car
There are many factors to consider when deciding between a new or second hand car. The price tag on a new car is more than a second hand vehicle but buying used may end up costing you more in the long run if you don’t do your research.
The condition of the car, the warranties available for it, and the finance plans are all costs that should play a role in your decision. While there is no simple answer, it’s important to look at the pros and cons of making your purchase.
Understand Your Warranty
New cars come with a variety of warranties. You can even upgrade your basic warranty to cover powertrain and corrosion, the latter being important if you live in an area where the roads are salted frequently during the winter.
Yes, the new car costs more, but if the damage or maintenance costs are covered, you may be saving money.
Used car warranties on the other hand depend on the dealer and the age of the car. Some cars don’t qualify for a warranty at all; this means that any repairs will come out of your own pocket.
Do History & Condition Checks
With a new vehicle, you can be sure that all the parts are working properly and there is no maintenance history to look into. Purchasing a used vehicle means that you’ll have to put in a bit more time and effort into researching the car.
- Has it been totaled?
- Does it come with service records? Websites such as Car Analytics can help you determine if the used vehicle you want has a clean history. Sometimes though, used cars simply break down because they’re older.
- Would you be able to financially cover repairs?
Finance Your Car
Since cars depreciate in value, the best way to pay for one is in cash, but that isn’t always an option for most people. New cars have excellent financing plans that include low interest rates, especially if you’re buying last year’s model and the dealer wants it out of the lot ASAP.
Used cars can be financed cheaply, but it all depends on your credit score and how much research you put into comparing loans.
With websites like MoneyExpert.com, you can compare car loans beforehand. If you already know your credit score and how much you can afford per month, comparing loans is the best way to make sure you get the best deal out of your used vehicle purchase.
The website also gives you useful information such as how much you can afford to borrow and how much interest you’ll be paying. If you’re able to borrow a bit more, you can in theory, choose a used car with less mileage or from a more reliable brand.
If you do your due diligence when it comes to buying a car, a used vehicle can be much less of a financial burden than a new one.
Not only is the starting price tag lower, a reliable model with a good maintenance history will mean less out-of-pocket costs in the long run. Plus, if you don’t plan on keeping the car for a very long time, depreciation becomes less of a problem with a second hand vehicle.
Finally, by looking at your financing options and adding a great loan on top of everything else, you can get yourself a great deal.
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Disclosure: This is a collaborative post with Car Analytics