Is the Shiny Car on the Lot Really Worth It?
This situation probably has happened to everyone: You’re driving along the road and you notice that your car doesn’t sound all that good. Before you realize what’s happening, your poor car takes its last gasps on the side of the road. You need a new car.
Television ads tell you that you need a new car. Although a new car does sound appealing, you’ve also heard from friends that buying a new car is a better idea in the long run. You’re faced with a tough decision. This article will look at the positives and negatives of buying new and used vehicles. This will help you pick the vehicle that’s meant to be yours.
The Glory of New
There’s something powerful about the looks of a brand-new car, all the way from the tantalizing smell to that shiny new paint. In this consumer culture, a new car is a symbol that tells everyone you have made it. There also are other benefits to buying a new car rather than a used car.
Positives:
Most new cars do have good reliability. The warranty also will likely cover any problems that do crop up. Buying a new vehicle also means that you shouldn’t have to worry much about how the vehicle was treated before it became yours.
A number of companies also have roadside assistance for new cars. This gives you peace of mind and can save you the expense of getting a roadside assistance program on your own.
New cars also usually have the highest fuel-efficiency standards and the newest safety features, like side-curtain airbags. You may also find a good financing program with either no interest or low interest rates. This can make it less expensive to buy a new car than it is to buy a used car.
Negatives:
Without a doubt, buying a new car is expensive. Most new cars cost more than used cars, and they depreciate very quickly in value. A new car loses the most value during the first few years that someone owns it.
The difference between what you paid for your car and what it is now worth can be substantial. According to the Kelley Blue Book, the MSRP (manufacturer’s suggested retail price) for a 2007 Ford Focus two-door hatchback is $14,335. The resale value for the same car is $11,995. The value has dropped about $2,300 just for driving the car off the lot.
Buying a new car therefore means that you are getting more debt and losing value more quickly than if you had bought a used car. You’ll also be paying more for car insurance than you would if you had bought a used vehicle.
There are also issues to think about on a deeper level. Buying a new car can contribute to the culture of consumption and not the culture of frugality. If you buy a new car, some would argue that you are buying into the consumerism culture. This can be an expensive proposition.
New cars also don’t stay new for very long. You eventually will find your first nick or scratch. Eventually, the floor will be stained, the doors will have dings, and you won’t have the thrill of having a new car. Your monthly payments will last much longer than your shiny new car.
A Humble Used Car
Although “pre-owned vehicles” - what the car dealers like to call a used car - don’t have the mystique and “shiny” factor of a new car, they are hard to top as a practical financial move. Buying a late model car with few miles can be a bargain seeker’s dream.
Positives:
Buying a used car helps you get the most amount of car at the lowest cost. A late-model used car often costs less than half the cost of a new car. Some dealers’ pre-certified programs come with good warranties. They often include the balance of the factory warranty and the opportunity to buy an extended warranty. Low-mileage, late-model used cars are almost new. You probably don’t notice the difference between a used and a new vehicle if you trade in your car every few years. Most modern cars can go 100,000 or more with few problems. You could probably get 60,000 more miles on a car with 40,000.
You can also buy a used car for only a few thousand dollars if you don’t have much cash and are willing to take a chance on a used car. Buying a care that needs a little tender loving care can cut the amount of money you need to spend on your “new” car.
Negatives:
Some used cars still have the stigma of being unreliable. There may always be a fear of buying someone else’s problem because you don’t know how its last owner treated the car, or why the last owner traded the car into the dealer. Even if the car is fine, you still need to perform maintenance sooner than you would on a new car. That maintenance will include radiator and transmission flushes, new tires, and new brakes.
It also may be difficult to find a used vehicle with the features you want. You also will have fewer options if you buy a lemon. Lemon laws usually only apply to vehicles under a certain age.
New or Used?
You should make your decision to buy a new or used vehicle based on many factors. You should be comfortable with your various financing options, as well as any long-term consequences. You need to feel safe and buy a vehicle that is reliable for your needs and meets your monthly expense budget. Your “new” car also needs to meet your requirements for amenities and features.
