The debate between whether to buy a new or used car has been raging for decades. While everyone would love a new car in theory, the reality is that you can get used cars at a much cheaper price, even if they are only a year or two old.
There are certainly pros to getting a new car that don’t necessarily have anything to do with the price. Let’s take a look at these pros before discussing the benefits of buying a used car.
New Cars: The Pros
Cheaper Insurance
Many people expect new cars to be more expensive to insure. After all, they are more valuable than used cars. However, the car insurance cost takes a number of different factors into account which impact the risk assessment. New cars are less risky to drive because they have not had time to wear down. The insurer can be 100% sure that all the parts come straight from the manufacturer. There has been no chance for a driver to take repairs or maintenance into their own hands.
While you’re paying more on your monthly car repayments, the savings on insurance go some way towards offsetting those costs.
The Environment
New cars are more environmentally friendly for a number of reasons. One is simply because old cars do not work as seamlessly as they once did, burning more fossil fuels to get from one place to another. The other reason is that car companies go much further today to ensure the environmental impact of a car is kept to a minimum.
Buying a new car means fewer emissions that harm the environment. New cars are more fuel efficient, which saves you money on gas. If you opt for an electric vehicle or a hybrid car, you even get tax benefits for reducing environmental damage.
Dealership Perks
When you buy a new car straight from the dealership, you get a number of perks. These include service plans, warranties, and the ability to return the car if there is a manufacturing issue. Used cars can come with some of these perks, but that has to be arranged through a dealer or car reseller, and you won’t get the best price deals from these people.
Resale Value
A regular car is not a good investment. Depreciation begins immediately, so you will never get its full value back. However, a new car will have a higher resale value in a few years than a used car will.
Those are some of the benefits of buying a new car. Do the benefits of buying a used car match up?
Used Cars: The Pros
Price
A used car is going to cost you significantly less than a new model, even if it is only a year old. You will need to go searching for the deals, but if you’re lucky you can find a car with low mileage at a reduced price simply for having been owned by someone else.
Rate of Depreciation
While a new car will have more value than a used car in a few years time, the rate of depreciation of the used car is much lower. A new car can lose up to 40% of its value in the first year. A used car will only lose a small fraction of its value, as the sharpest depreciation has already happened.
Easier to Buy Cash
If you want to buy a car with cash, you’re going to have a much easier time affording a used car. , but if you want to avoid monthly payments and high interest, buying a used car for cash lets you have the peace of mind of owning your car from the get-go.
Ultimately, whether you buy a new or used car will come down to your specific circumstances as well as what’s available. Ideally, you will want a new car that is in pristine shape and is best for you and the environment. However, you can get some great deals on used cars with low mileage.
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