Should I Buy a New or Used Car?

There are always advantages and disadvantages to buying new or used. We’ve explored them for you here.


Lower Maintenance Cost

Most new vehicles are reliable, and if anything does go wrong, it's usually covered by the warranty (some manufacturers even offer roadside assistance for new cars). New vehicles are likely to have better efficiency in fuel usage. All of this means that your maintenance costs will be lower.

It also gives you peace of mind that your car won’t break down frequently and will not have to spend countless weekends at the repair shop.

Higher Purchase Price

New vehicles most likely cost more than used vehicles of the same type. If you buy a new vehicle with a loan, it means that you are paying more interest than if you had purchased a used car (because purchase price is higher). New vehicles also come with higher insurance costs, as replacement cost are higher.

More importantly by the end of the first year, the thrill of having new wheels will be long gone, while the monthly payment will remain for a few more years. So if you are the type who likes changing cars every few years, a brand new car may not be the best option.

Loses Value Quickly

New vehicles depreciate in value more quickly too. A vehicle loses the most value in the first few years of ownership. In face, it loses a huge chunk of value the moment you drive it out of the dealership (about 20% - 30% according to some estimates). For take an extreme example, if you buy a new car and immediately change your mind and want to sell your car back to the dealer, the dealer will price your car significantly lower than the price you bought it for.


Can be More Affordable

Buying a used vehicle is an opportunity to get the best car for your money. You can often find a late-model, low mileage vehicles that priced at half the cost of a new one. For all practical purposes, late-model, low mileage used cars are basically new and you aren't likely to notice the difference between the used vehicle and a new one (except, of course, for the new car smell).

Unknown Reliability

Unless the previous owner is your own friend or family, you generally don't know how the vehicle was treated by the last owner. There is always that fear of buying somebody else's problem. So make sure you have a qualified mechanic check the used vehicle you are planning to purchase.

Buying a car is major financial decision so you need to balance your needs and what you can afford.

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