When to Buy Used VS New

When you are looking to purchase a vehicle, you will first be presented with the decision on whether or not to buy a new vehicle. There are many reasons why you should buy a used car, but there are also just as many reasons to purchase a vehicle that is new. When it comes to deciding on when you should purchase new, versus when you should purchase a used vehicle, your decision should be based on more than the price of the car payment. Instead of looking at the price and use the following questions to guide you in your purchase.

Do You Have a Trade-In or a Down Payment?

Purchasing a vehicle can be a tricky thing, especially when it comes to finding a loan that is reasonable. Financing your vehicle will be easier if you have another vehicle to trade-in, or you have a sizeable down payment to put towards the loan. If you have exceptional credit, your down payment will likely not be as high, and you may be offered more incentives to purchase a new vehicle. In some cases, you may find enough rebates, discounts, and other incentives to offset the cost of the down payment; thus, allowing a new vehicle to be driven off the lot without having to exchange money that day.

Are You Okay with the Depreciation Value?

Depreciation value is the amount of money the car is worth over a period of time. The largest depreciation comes immediately after the first purchase, when it rolls out of the lot with the first owner. The minute it is driven away from the dealership, most vehicles will lose up to 30-percent of their value. For your average car, that can be between five to six thousand dollars. Another 20-percent will be lost over the next two years. If you are planning on purchasing a new vehicle so you have a car that you can get seven to ten years out of, then this depreciation value may not affect you as someone who is looking for a vehicle for the next two years.

Have You Considered Maintenance?

One of the biggest benefits with purchasing a new car is the warranty. When you purchase a used vehicle, the warranty will not be as good as a new vehicle, which means you will need to pay for more of the maintenance. It is also possible for a used car to be in the shop more than a new vehicle, because it will have already had miles put on the engine and transmission.

These are just a few things to consider when you are purchasing a vehicle. There is also a good article about other items that are good to buy used Vs new. While only one of them deals with the car payments, the bulk of the decision should be on the life of the vehicle after the purchase.

Comments

  1. I’m looking at getting a F-150, and I’ve been trying to figure out if I should be looking at new or used cars. I think you make an interesting point about depreciation value. I’m looking for a truck that will last me a long time–I’m not interested in selling and buying new cars all the time. Maybe this means that a new car could be a good option for me. I’ll still have to carefully consider it.

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