If you have been shopping for cars for quite some time now or thinking about starting, chances are high that you have already come across these questions several times – which car to buy, new or used? And however obvious the answer may seem; the mere existence of this comparison is a valid enough reason for you to give an equal look to both sides. Now, the motives to buy a new car are pretty straightforward. Good offers, lower interests, latest technologies, and the pride to drive one. But used cars nowadays are not lagging behind and have done well to catch up to their newer counterparts.
So, as you are well aware of your reasons to buy a new car, let’s give you a few here as to why should you consider a used car as well.
Depreciation brings down the price of used cars
And by a lot! Say you liked a new family SUV that comes with all the latest installations and is quoted at a price of $50,000. As you purchase it and drive it out of the lot, the value of the car will drop by 20% immediately as it is no longer new. In money terms, if you wish to sell it right after driving it for 5 minutes, you will get only $40,000 back. Now, say you bring it home and drive it more a year. The SUV will undergo wear and tear and add a decent mileage to it. A mere twelve months and you will see a further deprecation rate of 30% and stare at a car with a net value of $28,000. Things will start to flatten from here onwards and after 3 years, your car will fetch you $25,000 when you go for a sale.
Now, say someone is selling a 3-year old model of the same SUV that you bought new. You are literally buying at a 50% discount, the same car with the same features. Depreciation brings down the value of a new car faster than it does to used cars and if you sell your used car after 3 years, you will get a better return.
But what about wear and tear?
Although depreciation takes those into account while bringing down the net values, modern automakers build their cars to withstand almost anything. The wear and tear of the first 3 years will never matter. Even the mileage figures do not haunt their owners. Current cars survive more than they used to a few decades ago and with proper maintenance, you might end up getting the same quality as a new one for a much lower price.
And then there is finance
It is cheaper to insure a used car as the total purchase price is much lower. You can make substantial savings here that may make up for the comparatively higher interest rates that you have to pay for accepting credit on a used vehicle. Plus, the registration rates come down proportionally as well, again due to the lower net overall price.
And as for financing your car, buying a new car can be a hectic or an impossible affair if your credit score is not up to the mark. Swinging the higher amount will stand as your first obstacle which eliminates itself when you settle for used cars where there are dealers and financial institutions who extend credit easily to bad score holders.
So, consider your options
Look into your resources and decide whether you are better off with a new car or a used car. When you choose authentic used car dealers like the Family Auto of Simpsonville, quality of vehicles will never be an issue due to their warranty policy. Combine that with the depreciation factor and then make an informed decision. Luxury or economy?