If you’re in need of a new set of wheels and wondering if it’s better to spring for a new vehicle or to go the cheaper route and buy a used vehicle, keep reading. Any decision surrounding a purchase as large as a car needs to be made with careful research and consideration. There are pros and cons on both sides of the fence here. Your final decision, though, will depend on your budget, personal preferences and particular needs.
To make your job a little easier, check out the list the pros and cons of each purchase type below.
Pros of new cars
• Status symbol. The strongest allure of owning a new vehicle is obviously its attractiveness.
• Easier shopping. When everything is completely new, there’s no need to drag your prospective new car to the mechanic.
• More financing options. If you’re considering a new car, you’ll be offered attractive incentives like cash rebates from the carmaker and better interest rates from the lender.
• Improved technology. Cars are getting more updates, and recent models have incredibly convenient technology, such as programmable settings, autonomous emergency braking, adaptive cruise control, blind spot monitoring, built-in Wi-Fi hotspots or lane-departure warnings.
• Automaker’s guarantee. All new cars come with warranty coverage.
Cons of new cars
• Price. Of course, a new car is going to be more expensive.
• Depreciation. New cars go down in value as soon as they leave the lot.
• Higher premiums. Insurance companies charge more for newer vehicles.
Pros of used cars
• Price tag. Let’s be honest here: No one would think of buying a used car if it weren’t for the savings. And those savings can be enormous!
• Less depreciation. The savings on a used car don’t end at the dealer’s lot. With the previous owner absorbing the initial depreciation on the car during its first few years of ownership, your vehicle will only experience a minimal drop in price.
• Lower insurance premiums. With your car weighing in at a lower value, your monthly insurance premiums will be more manageable.
• Lower interest. If you choose to finance a used car instead of a new one, you’ll likely have a higher interest rate. However, since the loan amount is lower, you’ll save in total interest payments over the life of the loan.
Cons of used cars
• Complicated purchase. You won’t be able to walk into a lot and walk out with your new car an hour later. With a used vehicle, you’ll want to get a vehicle history report, ask to see the vehicle’s service records and bring it to a mechanic for a professional inspection.
• Fewer choices. When buying pre-owned, you may not get all the items on your checklist such as color, upgrades, and features. If you find something in your price range that meets most of your specifications, grab it!
• Risk. Even if you do your homework well, you still run the risk of walking out with a lemon when you buy a used car.
It’s a multi-faceted decision, but by carefully weighing your options and personal preferences, you’ll drive off of the dealer’s lot with a real winner!
Noble Credit Union, voted one of the best credit unions in California, offers offer members full access to a wide range of financial services, including MyRewards Visa credit card, personal loans, online and mobile banking, new and used vehicle loans, and more. For more information about membership at Noble Credit Union, call (559) 252-5000 or visit NobleCU.com.