In general, the idea of buying a new car is enticing. You are getting a car fresh from the manufacturer, with all warranties and great performance and you won’t worry of it breaking down soon to warrant calling for tow truck rescue. You want to be the first person ever to drive that vehicle. While this could be the reason first-time buyers could prefer new cars, it is worth noting that the costs involved are probably not the lowest; hence, you might need to make a close comparison with the expenses of purchasing a used car. The National Automobile Dealers Association notes that an average United States’ citizen owns approximately thirteen cars in his lifetime. Suppose each of these cars was three years old, it could have been possible to save about $130,000 in your lifetime. Typically, the real money-saver is wrapped up in a financial word that sounds a little bit sinister: depreciation.
Depreciation: The dirty little secret of buying a car
Once you get to understand how the depreciation of your car can suck a significant amount of money from your wallet, you will learn a useful trick to save so much money in your lifetime that you probably won’t believe. Typically, there is a general belief that a car loses about 20 percent of its total value immediately you buy it. That is, just a gleeful drive and about a fifth of its total price cannot be recovered if you decided to sell it. For instance, if you bought a car for about $30,000, you have already lost $6,000 simply because you have owned it! You might not feel the hit immediately; the effect is felt much later when you decide to sell it. By the end of the first year, you are likely to lose more than 30 percent of the value.
Old stigmas of used cars
Traditionally, there was a general belief that buying a used car was typically buying the problems of other people. Today, this notion has greatly changed. The dependability and reliability of cars have significantly improved. It is relatively common for used cars to deliver up to 100,000 miles before you are required to inject money for major repairs. Besides, every car needs regular maintenance to help it run in a perfect condition. This includes aspects like oil changes, rotation, and replacement of tires, air filter cleaning, brake jobs, regular checking of coolants, among others. Therefore, whether it is a used car or a new one, you still need to perform this maintenance checks. The service gained from that is prolonged and efficient productivity.
Advantages of used cars
There are so many advantages associated with the acquisition of used cars as compared to new ones. First and foremost, the purchase price is far much lower due to the aspect of depreciation. As discussed earlier, an average new car depreciates at a rate of about 30 percent during the first year. Mark you; this is not the only advantage. Take a look at the following:
Car insurance rates are far much lower: Ideally, a car that has less value costs less to insure, especially when the packages being purchased are a collision and comprehensive coverage.
The registry renewals are relatively cheaper: The fee for registering each used car goes down after every one year.
Less stress: You probably do not go through so much stress when you get a ding in the door of your used car. However, if this happens to a new car, it is probably the first dent your car has experienced.
The advantages of new cars
Even though nearly everything about the used cars seems to cost less, new cars also come up with significant advantages. Some of them are discussed below.
The shopping of a new car is easier: There is a general assumption that all new cars are perfect. Therefore, the evaluation aspect is not a primary factor during the process of purchasing. You do not need to incur costs by conducting a mechanic. It is also easier to figure out how much you should pay for a new car because the information is all over the internet. However, it is worth noting that the process of negotiation is not the easiest.
More financing options: You will probably be able to access loans easily because of the available incentives for new cars. The interest rates involved are way better.
Advanced technology: Technology is advancing every day. Subsequently, more efficient cars are being invented.
Therefore, the choice is solely yours. Make the necessary comparisons and choose the right option.