New or Old Car?
Buy New or Old Car: Making The Decision When you decide to get a car, you have a wide range of options to choose from. First and foremost, you have to decide on a specific make and model. Next, you need to decide whether you want to buy a new or old car. The choice between new or old is very important and can influence your life in a huge way. Making the wrong choice can lead to negative consequences ranging from a shortage of finances to inability to maintain your car. A car is a huge investment for most people. The choice between buy new or old car can be influenced by a number of factors such as whether you can get a car loan or if you need to pay in cash upfront.
Advantages of A New Car
A new car generally offers numerous advantages because it comes straight from the manufacturer. First and foremost, a new car comes with a warranty. This is no surprise as many brand-new consumer products come with warranties. The warranty safeguards you against any unforeseen problems that may affect the functioning of your car in the months or years following its purchase. With a new car, you do not have to worry about having to do many repairs every now and then. A new car is still in good shape and the only thing you need to do is focus on routine maintenance and servicing.
If you get a car loan to buy a new car, your preferred dealer may offer you favorable terms and conditions such as low-interest rates. In this case, you can conveniently get your car and pay off the loan comfortably. Another advantage of buying a new car is that you get the latest features and technologies available in the automobile industry. New cars generally offer lower emissions and better fuel economy. Getting a hybrid car can reduce the amount of money you spend on gas every month. Also, new cars come with numerous smart connectivity and navigation features that most old cars lack. You can connect your car to your phone and other smart devices for enhanced user experience.
Disadvantages of A New Car
New cars, however, do have their shortfalls. First and foremost, you spend more money buying a new car as opposed to an old one. On top of this, the value of a new car depreciates by about 20% immediately you start driving it and continues to depreciate in the following months and years. This rapid depreciation in value causes you to lose a lot of money that could have been used for other more important things.
Another disadvantage of buying a new car is that you may get a limited edition model that uses a different engine than the one found in other models that come later. These limited edition models tend to have more problems and also do not have many spare parts and servicing options.
Advantages of An Old Car
Still, on whether to buy a new or old car, old cars have some advantages of their own. With an old car, you do not have to worry about the value of the car depreciating rapidly. The previous car owner will have already taken the depreciation hit for you. The resale value of an old car can remain nearly equal to what you paid for it if you take good care of it. There are different ways you can raise funds to buy an old car. You can get a loan or seek credit from a union. Because the value of the car will not change drastically over time, the loan or credit facility you will take will incur a very low-interest rate after you are done paying for the car.
Another advantage of buying an old car is that you can easily pay cash for it upfront. Old cars are not as expensive as new cars. Last but not least, an old car will not require you to pay high insurance premiums when compared to a new car.
Disadvantages of An Old Car
The disadvantages of buying an old car are quite obvious. Some old cars may have hidden problems that you may not be aware of at the time of purchase. Also, it may difficult to get parts for an old car that’s no longer in production.