Everyone loves getting a new car! The smell, the feel, the idea that you are the only one that has ever owned the car are all very appealing and compelling reasons to pay the extra money for new, right? However, things to consider are the higher costs and what you are needing the car for such as commuting to and from work, driving state to state to visit family, or tailgating at the next football game. Here are four things to consider when you are trying to decide between new and used for your next car purchase.
Even if you get a great deal on a new car, the value of the car is going to drop nearly twenty percent as soon as you drive that car off the lot. Imagine purchasing a twenty-eight thousand dollar car and as soon as the car leaves the dealership, the value will drop to about twenty-two hundred dollars instantly. In the end, the value of the car may not be a value at all! In contrast, a car that is just three years old with less than fifty thousand miles on the odometer will have already dropped in value before you bought it, making it a better deal for you.
The insurance premiums on cars just a few years old are significantly lower than that of new cars due to the overall cost of replacement parts being lower on older vehicles. Typically, you will not be required to carry as much coverage on a used car either. However, if the car is financed, the lender may still require full coverage on the car but it will almost always be at a lower rate.
More bang for your buck
Buying a used car offers you the opportunity to get a car with more options for the same or even lower price as a less equipped new car. Because the value of a car just a few years old is typically lower, those additional features are not as likely to drive up the price of the car. If you are on a budget, buying used might be the perfect way to get more car while staying within your target price range.
Many dealerships are offering cars tagged as certified pre-owned cars. These cars are late model, used cars that typically still have several years left on the factory warranty. When you purchase a certified pre-owned car, the dealer can often transfer the remaining warranty to you, giving you greater peace of mind and the confidence that if something major goes wrong, you can get it covered. Along with the remaining warranty, many dealerships offer extended warranties to continue coverage when the factory warranty has expired.