A new car is something to dream of for many in this world. Many of us still dream about a specific car manufacturer or model and truly want to possess that car. Buying a New Car or a Used Car is a huge decision.
But you’ll see that it’s not that easy when it comes to the ground reality. It never is. Cars are expensive machines, and some of the more luxurious ones may cost a fortune.
So, you not only need to reign in your wild fantasies but also need to decide whether you’d go for a new car or a used one, depending on your budget. Because, when you take off all those rose-tinted glasses, the world is rather dull.
Not everybody is fortunate enough to possess their dream car, and millions worldwide can’t even afford a new one. As inflation only knows one route, and that’s upwards, you need to plan meticulously before buying a car so that it doesn’t mess with your finances and other life goals.
A new car has its appeal, all shiny and glamorous. But it can get very expensive, especially if the company charges heavily for repairs, and the car consumes a lot of fuel.
Any used car will come way cheaper. The rate of depreciation will be far lesser too. But it will present its own set of problems. Warranty, availability of original parts, and small problems here and there will be part of the deal.
So, it’s not a universal decision. You must consider yourself, your particular needs, expectations, and most importantly, your budget. Here are 4 aspects you can base your judgment on:
One of the best parts about buying a new car is the warranty. For that time being, the company covers most of the major problems and provides repairs. That takes away the anxiety.
You also get roadside assistance with many new cars. Unfortunately, used cars are not as reliable and may need a few repairs, and, likely, they won’t be covered by any sort of warranty.
But if you buy a Certified Pre-Owned (CPO) car, it may come with an extended warranty. In addition, these companies can give you a considerable catalog of new and used cars for sale.
As technology has improved, many modern cars can easily surpass 100000 miles without massive repair. And it will take almost 10 years in most cases to go past that mileage.
So, you can save money by buying a not-so-new-but-not-so-old-either vehicle and then sell it after a few years without bearing the brunt of any expensive repairs.
In terms of insurance, new cars will always cost you more because of their higher replacement value. But you can get away with spending a lot less on used cars.
If you buy them through dealerships, they may force you to get fully insured. But the insurance fee will be much lesser, especially if you pay in cash.
And if you are buying used cars on your own, it’s up to your judgment. Of course, the risk is higher, but you can even avoid the insurance fee.
New cars depreciate way faster than used ones. As a result, all vehicles lose most of their value in the first 3-4 years. And an enormous portion of that loss happens right after you start your car for the first time. By many industry estimates, your car loses 20% of its value instantly after getting on the road.
And your new car doesn’t remain new for that long either. The smell and the shine wear down, becoming more of an accessory rather than a luxury.
Most used cars have already surpassed the depreciation and have been paid for by the previous owner. So, you get more value for your money. And when you decide to sell, you’ll get better returns against the price you paid.
New cars always get the newest technologies, from better fuel efficiency to the latest safety mechanisms. So, as a driver, you feel more secure. Even in electric cars, that difference remains. Many software updates are exclusive to the higher-end models, and the old cars stop getting updates after a few years. The new models are always up-to-date and have longer update cycles.
In the case of used cars, many lemon laws will prohibit your car from getting the clearance to be termed as safe. These laws generally apply to cars above a particular age and those with less than a certain number of miles.
Whether you should buy a new car or a used one is always personal and subjective.
Consider the four points above, think about your priorities, check your budget, and then make your decision.