One of the main questions most people must consider when purchasing a vehicle is whether to buy new or used. There is not just one answer that fits all situations, vehicles, and personal budgets. There are several factors that consumers must consider to crunch the numbers and make a well-reasoned choice.
Companies like Vehicle Service Center exist to provide customers the peace of mind of walking into any dealership with the details of an auto protection plan already chosen. There are many auto protection plans and warranties to allow customers to focus on price, vehicle condition, and options when they visit the dealership.
New – Pros
Safety, Connectivity, Reliability: One of the big attractions today for new vehicle buyers are all the safety features, connectivity and the vastly improved reliability of new cars being offered at dealerships today. New vehicles for sale now have rear cameras and sensors that warn the driver of veering out of the lane or of imminent collisions. The new breed of cars and trucks come with connectivity features that allow one to take their music and keep track of road conditions all at the same time. Also, they are built to be more reliable than in the past, in addition to more readily available replacement parts.
Less Maintenance: New cars will only need routine maintenance for the first few years.
New – Cons
Higher Purchase Cost and More Depreciation: The most significant con that new car buyers face is the sticker price and depreciation. On average, a new car today will cost about $37,000. Used cars cost on average about $20,000.
Depreciation means the amount that the vehicle loses value each year. When someone drives a new car off the lot, most vehicles immediately are worth 10 to 20 percent less. Within the first three years, most vehicles depreciate about 30 percent. This figure matters if you intend upon selling the car within the first several years of ownership. If you buy a new car for $30,000, and you sell it three years later, it may have depreciated in value by $10,000.
Going Underwater in Your Loan: Depreciation matters if you would like to sell your vehicle before your loan is paid off. If the vehicle has depreciated in value such that it is not worth what you owe on loan, you are “underwater” in your loan and may not be able to sell it for a price that would pay off what you owe.
More Expensive Insurance Costs: Newer vehicles are often more valuable, and therefore more expensive to insure and register.
Used – Pros
Lower Purchase Cost and Less Depreciation: Most vehicles that are used will obviously cost less than a new car of the same type. Realize, though, this is not always true. Sometimes, the incentives the dealer is providing will mean a year-old, pre-owned vehicle may have a higher purchase price than the new similarly-equipped model.
If you can buy a used vehicle that is around three or four years old, you can eliminate the steep depreciation that most new vehicles experience. After the third year, most vehicles depreciate at a smaller rate.
Cheaper Insurance Costs: Since pre-owned vehicles can often cost less to insure, this can create a considerable amount of savings, especially for young drivers who often must spend exorbitant amounts of money on insurance.
Used – Cons
Condition: One huge issue that consumers face with pre-owned vehicles is wondering what is going on under the hood. Expensive repairs can negate the cost savings that most used cars provide. A good tip is to both pay for a search of the vehicle’s history on Carfax and to have a qualified mechanic look over the vehicle and provide you an estimate of any needed repairs as well as a recommendation as to whether the car is a good bargain. Carfax will provide a history of the vehicle’s maintenance record, prior accidents, and the estimated mileage.
Vehicle Service Center (VSC) can also help eliminate worries about a pre-owned vehicle purchase by providing just the right automotive protection plan tailored to your needs, budget and the specific vehicle you are purchasing. Conducting a Carfax search, having the car evaluated by a trusted mechanic and utilizing an automotive protection plan from VSC can eliminate most of the danger and headaches associated with trying to purchase a pre-owned vehicle, allowing most people to save a considerable amount of money on their vehicle purchase.
Some Vehicles Don’t Depreciate as Much: Some other things to consider are the type of vehicle you are purchasing. Trucks are a good example. Many people today are buying trucks as their family car or even as a luxury vehicle because trucks are now being made with so much more rear seating space. They can be appointed with luxury features if that is one’s desire. Trucks tend to hold their value and depreciate much less than cars. One reason for this is that trucks are made to be tougher and more reliable than the typical commuter cars. They also tend to suffer much less damage in accidents and do not tend to have major changes in trim between model years, so they don’t look dated as quickly as most cars. It is less of a disadvantage to buy trucks new because they depreciate less in value each year.
Buy New and Keep: Some people just simply bypass the depreciation issue entirely by purchasing a reliable vehicle that is either new or used, fully intending to hang onto the vehicle for many years or until it cannot be repaired economically. Car buyers that buy a new or used vehicle to keep it and maintain it will eventually not have any loan payment to make. That monthly savings when there are no more loan payments due can be set aside for the larger repair events that will eventually occur down the road.
Overall, it depends upon your finances, the type of vehicle you intend to purchase and how long you intend to keep your car when deciding if it is better to buy new or used. Vehicle Service Center can help create peace of mind by providing our customers with automotive protection plans that eliminate the worry and danger of ending up with expensive automotive repair bills.