New Cars vs. Used Cars
Choosing between new and pre-owned cars can be a complicated decision. To make your job a little easier, we’ve outlined the pros and cons of each purchase type below.
Pros of new cars:
- Fewer repairs. You can assume you won’t be dealing with major repairs or maintenance issues for a while, and if you do have any problems, most dealerships have a warranty for at least the first few months.
- Easier shopping. There’s no need to drag your prospective new car to the mechanic to check it out. All you need to do is your research on which type of car you want, make the deal, and head home with your new car.
- Improved technology. Recent models have incredible technology, such as programmable settings, autonomous emergency braking and adaptive cruise control. Some people may feel safer in a newer car knowing they have all the new safety technology.
- Automaker’s guarantee. New cars usually come with warranty coverage. Often you get full protection for the first three years or 36,000 miles, whichever comes first.
Cons of new cars
- Price. Of course, a new car will cost more. But what makes it more painful is the fact that you can get a comparable vehicle for much less. Most dealers and individual sellers are more likely to give a better deal on a used car because the buyer can point out small quirks that may need fixing in the future.
- Depreciation. New cars go down in value as soon as they leave the lot, often by 20%. At the end of the first year of ownership, your new car can drop another 10%. While your used car will still be going down in value, you won’t be losing as much money because you didn’t have to pay the full price of the new vehicle.
- Higher premiums. Insurance companies charge more for newer vehicles.
Pros of used cars
- Price tag. It’s not unusual to find a used car in decent condition with a price tag that’s 30% lower than a similar brand’s new model. This is the main reason that a lot of families buy used cars in the first place.
- Less depreciation. With the previous owner absorbing the initial depreciation on the car, your vehicle will only experience a minimal drop in price.
- Lower insurance. With your car weighing in at a lower value, your monthly insurance premiums will be lower.
Cons of used cars
- Complicated purchase. With a used vehicle, you’ll want to get a vehicle history report and bring it to a mechanic for an inspection. A lot of sellers will lie or just assume the history of a vehicle, which means it is your responsibility to get it checked out by a mechanic you can trust to tell you the truth.
- Fewer choices. When buying pre-owned, you don’t get to be picky about things like colors and features. You kind of just have to go with what you can find, especially if you’re only willing to look within your local area.
- Risk. Even if you do your homework well, you run the risk of walking out with a lemon when you buy a pre-owned car. This can be a devastating factor that many people aren’t willing to risk.
- Buying a new car can be an exciting yet stressful experience. Stop by Gulf Winds today to talk to one of our member advocates to see what the right path for you is when it comes to purchasing a car and taking out an auto-loan. Already know exactly what you want? Visit one of our branches to start the pre-approval process or click here.