Choosing a new vehicle or a used one is a big decision, with advantages and disadvantages on both sides of the board.
Deciding which type of vehicle will work best for you is very important, and there are several things you need to consider when deciding whether to purchase a new or used car.
There are far more important cost issues that require your attention, than whether or not you can afford the monthly payment (although, that’s an important one, too).
Insurance rates vary greatly between different types of vehicles.
Some factors that can affect the amount you pay include the age of the vehicle, its safety features and the horsepower of the engine.
New vehicles may have more safety features, but may also require a higher amount of insurance versus what would be needed for a used vehicle.
Another consideration before buying a car through an auto dealership is the amount of maintenance that may be required to keep your new or used vehicle on the road.
New cars typically have a warranty, while most used vehicles do not, or have only a very limited, short-term warranty.
Used vehicles can carry much greater maintenance costs; this is why it’s important to have any used car inspected by a reputable mechanic prior to making the final purchase.
Fuel economy is another thing to think about when choosing whether to buy a new or used vehicle. If you’ve been considering a hybrid, they can be very tough to find on the used market.
Any new and used car dealer will most likely tell you that they only see used hybrid or truly fuel-efficient cars very rarely, especially with the volatile cost of gas in the US.
If fuel economy and sustainability are very important factors to you, keep in mind that new hybrids and other fuel-efficient vehicles may qualify for income tax deductions or rebates.
Down Payment and Trade-In Costs
If you have good credit, you likely won’t have a problem whether you decide to buy new or used, and down payment may not even be required.
However, if your credit isn’t great, you may find yourself needing a very large down payment to buy a new car; if you’ve got a trade-in, it can be taken as part or all of a down payment on either a new or used car.
Keep in mind that, depending on the state of your credit, buying a new vehicle may work out better in the long run due to dealer and manufacturer incentives, rebates and low-cost financing.
There are many factors to consider when making the decision of buying new or used for your next (or first) vehicle.
Ultimately, considering many different aspects of buying and owning a vehicle is the key to making the right decision for you.
If you have a good idea of what you want and what kind of monthly costs you can truly afford, you’re more likely to be satisfied with your decision and your purchase.