A car is a serious commitment. It requires care, maintenance, and a steady supply of finances. Essentially, once you buy a car, you never stop taking care of it. That’s why it is important to carefully consider the kind of vehicle you will buy.
Both new and used cars have unique benefits and drawbacks. Some drivers swear by used vehicles, no matter how old they are (that includes those destined for the salvage yard). Others prefer the new car smell and modern features of brand-new automobiles, even if they cost significantly more.
Continue below to learn about the pros and cons of owning each type of vehicle.
Benefits of Used Cars
Cheaper Purchase Price
One of the greatest benefits of used cars is their price. You can buy a used car for thousands of dollars less than its brand-new counterpart. You can save anywhere from $2,000 to over $10,000 in purchasing a used vehicle. Moreover, the older the car you are willing to buy, the cheaper it will be.
Lower Insurance Costs
Although auto insurance rates are complex for any vehicle, the premiums for used cars are often cheaper. Insurance companies and dealerships require full vehicle coverage for new and financed vehicles. Even if you finance a used car, it simply won’t have the same value as a new car and your insurance is likely to be much cheaper.
Cars lose 9 percent to 11 percent of their value the moment they leave the dealership and then another 10 percent each year. With a used car, you won’t have to worry too much about depreciation because it has already lost most of its value. While a used car will continue to depreciate, it will do so at a slower rate than a brand new one.
Benefits of New Cars
A new car has a clean slate: no miles, no accidents, no shoddy repairs. It is in perfect condition. Although some makes and models come with engineering issues, it takes most new vehicles a while to need repairs. This way, you can drive for several years with peace of mind that your car won’t break down.
A new car’s warranty allows you to drive worry-free for a certain amount of time. The most common offer is for three years or 36,000 miles. Within these bounds, your dealership will cover any malfunctions or repairs.
This warranty is usually included in the new vehicle’s price so you won’t be required to pay more for this coverage.
New cars are always getting technological upgrades that older vehicles cannot compete with. Parallel parking assistance, the increased fuel economy, hybrid and electric options are all technologies that 10-year-old vehicles can’t dream of supporting.
Drawbacks of Owning a Used Car
Lack of Modern Safety Features
While safe driving habits are crucial, even the best of us are not immune to accidents. Modern safety features like parking cameras, lane departure alerts, and automatic steering help to prevent accidents. These features are found in new vehicles, but older used cars are unlikely to have them.
When buying a used car, you are limited to the options that are available. This means that if you want customization, you would have to take your car to an auto shop. If you are looking for a particular make and model with specific features, your search might take some time.
They Come With Miles
One of the greatest disadvantages of used cars is that, well, someone already used them. As a result, they come with miles and possibly several issues. While you can find affordable used cars with less than 50,000 miles on them, they are simply nothing like new vehicles.
Drawbacks of New Cars
They Are Expensive
The most obvious drawback of a brand-new vehicle is the cost. Even lower-end cars cost an entire year’s salary. Not only is the purchase price expensive, but so is the insurance. New financed cars are required to have full coverage until they are paid off. Depending on where you live, this can be a significant expense.
New cars lose value as soon as they leave the dealership, and continue to drop significantly in value throughout the first three years of ownership. After five years, a new car will have lost 60 percent of its original value. This means that if you try to sell the car, you will not get anywhere close to the amount you originally paid back.
Must be Purchased From a Dealership
There are a lot of options for purchasing a used car. You can go through a dealership, online companies, or the millions of private sellers available. However, a new car must be purchased directly from a dealership. While this is not necessarily a bad thing, dealerships have the reputation of being stingy, hassling you, and giving you mountains of paperwork to sign.