It’s exciting to purchase a new car – whether that car is brand new or new-to-you!
When it comes to choosing a new or used vehicle, there’s a lot to be considered. You’ll want to find the right fit for your situation – and you may be surprised to find that your initial decision may not actually be the best choice for you. Each type of vehicle has pros and cons that can help guide your decision.
We’ve put together this guide to help you make the best choice for your car purchase.
New Cars
When you purchase a new car, you’re the first and only owner of the vehicle. You will purchase the vehicle from a dealership or order directly from the company. There are many pros and cons when it comes to a new car, especially when it comes to pricing and technology.
Pros of New Cars
- Fewer repairs. With a new vehicle, you can assume you won’t be dealing with major repairs or maintenance issues for a while.
- Easier shopping. When everything is completely new, there’s no need to drag your prospective new car to the mechanic. It’s also easier to determine a fair price for the car.
- More financing options. If you’re considering a new car, you’ll likely be offered attractive incentives like cash rebates from the carmaker and better interest rates from the lender.
- Improved technology and safety features. New cars have updated technology and safety features. This can include features like programmable settings, autonomous emergency braking, adaptive cruise control, blind spot monitoring, built-in Wi-Fi hotspots or lane-departure warnings.
- Automaker’s guarantee. All new cars come with warranty coverage. This will typically be offered as the first three years or 36,000 miles, whichever comes first. However, some vehicles may have even more robust options available.
Cons of New Cars
- Price. As expected, a new car is going to be more expensive. You can expect a new car to have a higher price point than a used version of the same model.
- Depreciation. New cars go down in value as soon as they leave the lot. In fact, a new car can lose up to 20% of its value once it’s owned. At the end of the first year of ownership, your new car can drop another 10% thanks to the mileage you’ve clocked and the wear and tear.
- Higher premiums. Insurance companies charge more for newer vehicles. You’re also more likely to want the maximum coverage and protection for your new car.
Used Cars
A used car can be purchased from a dealership or directly from the vehicle’s current owner. Used cars also have their own pros and cons to consider. For example, the vehicle may provide a more affordable price tag but may need additional research on the vehicle history.
Pros of Used Cars
- Price tag. Used cars are a great option for your budget and the savings can make a big difference both in your monthly payment and overall purchase price.
- Less depreciation. The savings on a used car don’t end at the dealer’s lot. With the previous owner(s) absorbing the initial depreciation on the car, your vehicle will only experience a minimal drop in price. You can save yourself thousands of dollars in loss if you want to sell your car a few years down the line.
- Lower insurance premiums. With your car weighing in at a lower value, your monthly insurance premiums will be more manageable. You can also opt out of full protection when your car isn’t a new model.
- Lower interest. If you choose to finance a used car instead of a new one, you’ll likely have a higher interest rate. However, since the loan amount is lower, you’ll save in total interest payments over the life of the loan.
- Predictability. When purchasing a just-released car, you never know what issues might crop up in the future. But, when you’re buying a model that’s been around for a few years, you’ll have a wealth of research and ratings available on your car so you’ll know what to expect.
Cons of Used Cars
- Complicated purchase. You won’t be able to walk into a lot and walk out with your new car an hour later. With a used vehicle, you’ll want to get a vehicle history report, ask to see the vehicle’s service records and bring it to a mechanic for a professional inspection.
- Fewer choices. When buying pre-owned, you don’t get to be picky about things like colors, upgrades and features. If you find something in your price range that meets most of your specifications, you'll want to grab it.
- Risk. Even if you do your homework well, you still run the risk of walking out with a lemon when you buy a used car.
Whether you’re looking for something more budget friendly or maybe you’d like the newest safety features, there are options available for you. Ultimately, you’ll need to take a look at your budget, personal preferences, and specific needs before making your decision. Use this pros and cons list to help you decide whether a new or used car is the right choice for your next purchase.
Once you've made your decision about your next car purchase, our specialists here at Wasatch Peaks can help with our flexible terms, low rates, and excellent service! Call, click, or stop by your local Wasatch Peaks branch to get started.
