Should you buy a new car or a used car? It’s an age old conundrum that every car buyer has to face, and neither answer is right or wrong. It all depends on your wants, needs, budget, and appetite for risk. Let’s take a look at the costs and benefits of buying both new and preowned vehicles, so that you can make the right decision when you begin your car-buying adventure.
Advantages of New Cars
Some buyers find the new car smell intoxicating and would never consider buying used.
There are a lot of benefits of purchasing new. You can get the latest technology, including things like Apple CarPlay and Android Auto. Most new cars come with Bluetooth phone connectivity, so you can use your phone legally while driving, without having to purchase an aftermarket Bluetooth interface.
Advanced safety features and driver assistance technologies have made great strides in the last several years, and now you can get safety tech, such as autonomous emergency braking, adaptive cruise control, blind spot monitoring, and lane departure warning.
Fuel efficiency has been steadily improving as new models are introduced, so there’s a good chance that the SUV that is new today will outperform the efficiency of a similar model that’s older. Fuel costs are a major component of a car's total cost of ownership.
You’ll know that there’s no wear and tear on your new ride, that it has never been in an accident, and that there’s much less chance that there are any uncorrected recalls.
Automobiles come from the factory with warranty coverage for at least the first three years or 36,000 miles, whichever comes first. In fact with Toyota we take so much time, care and pride in every car we make we give each one a five-year (or 100,000 mile) warranty. Which means you can just get in and drive safe in the knowledge that if you do ever need our expert help in any way, we’re here for you.
Purchasing a new car is easier than buying used. With so many versions of the model you want at the dealership, you’ll likely find the car you are looking for on the lot. If not, your local dealer can trade inventory with another dealer to find the exact model, option list, trim level, and color you are looking for.
You can usually get great financing incentives and lease deals on new cars that aren’t typically found on preowned models. If you do the math, some zero percent financing deals can bring the total amount of money you’ll pay for the car down to the level of used cars with traditional financing.
Disadvantages of New Cars
The biggest problem with choosing a new vehicle is that you will typically pay a whole lot more for the car when it is new than you would for a comparable used model. And the higher costs don't stop with the price. Because its value is higher, you’ll also have to pay much more in sales tax.
It’s not unusual for a new car to lose 20 percent of its value the moment you drive it off the lot, so if you don’t pay at least 20 percent down, you’re liable to owe more to your lender than it is worth.
Advantages of Used Cars
The greatest advantage of going used is that the original owner will have absorbed the costly depreciation that occurs in the first few years of ownership. Their pain is your gain, however, as it will allow you to save thousands of pounds on the cost of your car. You can either budget much less for your vehicle purchase or take a new-car-sized budget and buy a bigger or fancier model than you would otherwise be able to.
Features such as navigation and leather seats don’t add as much to the price of a used vehicle as they do to the price of a new one, so you may be able to get extra features for much less money.
Since the value of the vehicle will be lower, you’ll also save on your sales tax and insurance premiums. If you are financing, you’ll probably save in total interest payments, as the loan amount that you’re paying interest on will be lower, even if the interest rate is a bit higher.
Disadvantages of Used Cars
Talk to new car buyers, and many will tell you that they don’t purchase used because they feel like they're just getting someone else’s problems. Depending on how it was cared for, they may be right. You need to take a couple of extra steps in the car-buying process to check the history of any used car that you're considering.
If the car is more than three to five years old, it is unlikely that you will have any warranty coverage, unless you buy an extended warranty yourself, so you’ll be financially exposed if any major repairs are needed.
When you buy a preowned car, you won’t be able to be as picky about features or color as you would be if you were ordering a new car from a dealership. There are lots of sources available to find used cars, but if you want a very specific car, you’ll either have to compromise or you’ll be waiting a long time for one to become available in the right condition for the right price.
Also, buying used isn't necessarily a financial benefit with every car. You have to buy the right car to take advantage of the previous owner’s depreciation. Some vehicles hold their value really well over the first couple of years, so you won’t save a ton of money by purchasing them used – especially if there are generous new car financing deals available.
If you would like any further advice on new verses used cars, please get in touch with us at Farmer & Carlisle in either Leicester or Loughborough on 0116 285 2851 (Leicester), 01509 215 731 (Loughborough), where we have many used and new vehicles to show you and can use our expertise to advise you based on your needs!
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