New cars offer low mileage, extended warranties and low initial maintenance costs. However, buying a new car has short and long term disadvantages compared to buying a used one. As a consumer, you should evaluate all the pros and cons to get the most out of your investment.
Price
Typically, the initial cost of a new car is higher than that of a used one. The dealership may offer temporary low interest rates for new vehicle buyers. However, once the original interest rate expires, your monthly payments may be higher than with a used car.
Higher prices often mean longer loan terms, and it is possible that by the time you decide to sell or trade your car, you may not have covered the loan for it. In addition, taxes and registration fees for new vehicles are generally higher.
Depreciation
New vehicles can lose about 40 percent of their value in the first two years. Even if a particular make and model has a proven track record of maintenance cost and performance, you may discover additional challenges and difficulties during initial use.
In the case of a used car, you already know the performance history of a particular make, model and year of manufacture, giving you the opportunity to purchase a vehicle with a solid history without facing initial depreciation issues.
Peculiarities
The indicated dealer prices, including promotional ones, as a rule, include only certain parameters. Each additional function for a new car increases its value. In the case of a used car, many additional options may already be included in the price as part of the purchase price of the original purchaser. Accordingly, the subsequent car owner saves on these functions.
Negotiation
It is much easier to bargain with a private seller when purchasing a used vehicle than with a dealer when selling a new car.
Insurance
Insurance rates are high for new cars, as insurance companies pay a high price for parts or replacement of a newly purchased vehicle in the event that it is damaged or stolen. In addition, if you buy a car on credit, lenders usually require you to pay for the full insurance package.
