Buy a new car is all about decisions, from the color and style of the vehicle to whether you want the latest tech or fuel-efficiency. One of the biggest choices you will have to make is between buying a new vehicle or one that’s new-to-you.
Deciding between buying new or preowned can be a tough choice. Both options have pros and cons, so it is important to consider all possibilities before heading to the dealership.
Buying A New Car
Pros
- New car smell and feel. There’s no feeling quite like driving away in a brand-new car. The pristine condition is a major pro for many. Plus, you don’t have to take time and have a mechanic inspect the vehicle before you purchase.
- Latest and greatest technology. With a new car, you’re getting all of the newest features available, like advanced safety technology, smartphone connectivity, modern design, and more. These features are often updated with each new car rollout, so you won’t feel left out when it comes to the “next big thing.”
- Reliability. You can drive away confident that your new car will be reliable for at least the next several years. Plus, most new cars offer factory warranties to cover any issues that come up within the first years of ownership.
Cons
- Cost. New cars typically come with a higher price tag when compared to used vehicles. All those bells and whistles increase the price and could translate to a longer loan term with increased interest payments.
- Depreciation. The value of a new car depreciates quickly; both when you first drive it off the lot and within the first year.
Buying A Used Car
Pros
- Lower cost. The largest upside to buying a preowned vehicle is the price tag. New cars depreciate quickly within the first year and those individuals buying preowned can benefit greatly from that initial price drop.
- Luxury car option. While buying a brand-new luxury car may be too much for your budget, a preowned luxury vehicle may not. With a lower initial price tag, you might be able to drive away in a higher-end car than you could afford new. NOTE: Before buying a luxury vehicle (even if preowned), be sure to contact your insurance company for a quote. Your insurance premiums may increase and you do not want to be caught off guard.
- Reliability. Preowned vehicles are commonly thought to be less reliable than new cars, but much has changed over the years. Most dealerships run their used cars through rigorous certification programs to ensure they are safe to drive and will last for years to come. Plus, most certified preowned vehicles come with extended warranties provided by the dealership.
- Less depreciation. Because preowned vehicles depreciate at a much lower rate than new cars, the overall value of your used vehicle will remain relatively steady for resale in the future.
Cons
- Damage or wear-and-tear. With a preowned car, you will not get that spotless, new car experience. You may have to deal with small things like a stain on the carpet or maybe a slight scratch in the paint. However, if you purchase from a dealer, they will usually address these small issues the best they can.
- Older technology. Car makers update the technology in their vehicles with every new model. When considering a preowned car, you may not get the latest and greatest features present on the newer models.
- Fewer options. With new cars, you can often pick from a variety of options such as paint color, interior color, and details. Unfortunately, when choosing between preowned vehicles, you likely will not have quite the same selection. Finding a specific brand, model, or color of the car within your price range can prove to be more challenging.
Buying a car is a financial investment, and the most important thing a car can do is get you from point A to point B safely. Take time and explore all your options. Find that perfect vehicle that fits you, but also fits within your budget.
Credit Union 1 can help you take the next step forward with quick pre-approval. Start an auto loan application today to get on the road to your new (to you!) car.
