Buying a car is a major financial decision, and being well-informed will help you make the right choice. There are many pros and cons to buying either a new or used car, and examining these factors will give you the information you need to make the right decision.
Buying a New Car
Little To No Maintenance
There are many advantages of buying a new car. First, you can be sure of the vehicle's history. You know that it has not had maintenance issues or been involved in a wreck. New cars often come with a manufacturer's warranty that will cover any major issues to the car within a certain period of time. Some manufacturers offer warranties of up to 10 years. A new car is reliable, needs little to no maintenance and can give you a huge bang for your buck.
High Initial Investment
Buying a new car, however, does come with several drawbacks. First, a new car will depreciate quickly within the first two years. This means that the moment you drive the car off the lot, its value will have dropped significantly. New cars are significantly more expensive than used cars, so you'll be spending a lot more.
If you take out a six-year loan on a car, you will still pay the same price for the car when it is five years old as you did when it was brand new. Many new car owners find themselves "upside down" in their loans for many years, meaning they owe more than the car is worth.
Buying a Used Car
Economical And Low Up-Front Costs
A used car can be a great economical option for those that want to save money on their transportation options. Since depreciation on new cars happens most during the first two years, a late-model used car will give you some of the same advantages of a brand new car without the hefty price tag. In many cases, used cars may still be covered under the original warranty.
High Maintenance Costs
There are some major cons to buying a used car. The biggest one is that older cars often suffer from maintenance problems. These cars may require you to invest in costly repairs that eat up your budget. You may also incur additional transportation expenses while your car is being repaired.
Poor Or Unavailable History
With used cars, you can never be quite sure of the car's history. The car may have been salvaged or subject to flooding. If you don't have accurate records, you will never know. This is especially true if you are not buying from a dealer. Going to a dealership can greatly improve your chances of getting a used car with a good history.
While there are benefits and disadvantages of buying new and used cars, consider your budget and your family's needs before making a decision.
Informational credit to Honda Barn.