Owning your very first car can be such an exciting experience; you get to have so much more freedom and you can conveniently go anywhere and anytime. However, when shopping for a vehicle, you are most probably torn between buying a brand used cars or brand new one.
This article will breakdown the pros and cons of buying brand new and used cars.
Brand New Car
Buying a brand-spanking-new car comes second to a new house; both are two of the biggest investments you could probably make throughout your lifetime.
This list of pros and cons will help you assess if buying a new car will give better value for your money than buying a used one.
The Latest Features and Technology
Car manufacturers release new vehicles with the latest technology and newer features. While a Mercedes Benz E55 AMG 2000 model might be your dream car, it obviously doesn’t have the latest features, equipment, and navigation system 2013 models have.
Most brand-new vehicles come with comprehensive insurance, which has better coverage, and offers TPL Insurance (Third-Party Liability).
However, insurance costs can be more expensive especially if you purchase a more expensive car.
There’s something so satisfying about driving a car, which is new and fresh from the manufacturer. Owning a brand new car creates a unique connection and memories as you go on road trips and long drives.
As soon as you start driving your car, it loses an estimate of 11% of its value. Approximately, in five years or by the time you finished paying for your car loan, your car’s worth will be an equivalent of about 40% of its original total value.
If you got your new car through an auto loan, most finance companies will require you to avail the full insurance coverage until your debt is paid in full. The higher the vehicle’s price tag, the higher the insurance premium’s cost will be.
In case you are taking purchasing a pre-owned car into consideration, here is a list of its pros and cons to help you assess whether it is a better investment to make or not.
One of the main reasons why people resort to buying used cars rather than a new one is because of the difference in price points. Generally, used vehicles have a lower cost depending on the manufacturer and year model. Thus, if you have been dreaming of driving a certain car, but your budget won’t allow you to get a new one, don’t lose hope as you might find it in a used vehicle dealer.
While depreciation is the biggest detriment when it comes to brand new cars, the situation is the opposite in terms of purchasing second-hand cars.
Since the first owner has already absorbed the car’s highest depreciation points in its first few years, the second owner will enjoy the decline in depreciation of its overall value.
Features and Equipment
Older car models do not have the latest technology and equipment brand-new cars have.
One of the biggest cons when it comes to purchasing a pre-owned car is the mileage. A five-year-old car with over 75,000 mileages is considered average and anything more than that is considered high-mileage. The higher the mileage, the lower the price; however, the performance may not be the best anymore.
Although both brand-new and used cars are considered good investments, one of those two can be a better choice depending on your needs, preferences, and budget.