One of the most important decisions you’ll make when purchasing a car is deciding whether you are going to pick up a brand new car or instead opt for a second hand vehicle. There are lots of pros and cons for each.
Pros and Cons of New Cars
The upside of a new car is the obvious: it’s new. That means that you’re less likely to encounter unexpected problems with the car, but also if you do have anything go wrong, it will likely be covered by warranty. A new car also gives you the opportunity to upgrade to the latest and greatest technology: smartphone syncing, smart locks, increased gas mileage and all sorts of other bells and whistles. This also includes safety features, which is an important and often overlooked product feature.
The downside of new cars is the price – you pay a premium to be the first driver of a new vehicle and it’s difficult to buy a new car anywhere but from the dealership – which takes its own markup. However, it’s important to look at the full picture. Sometimes the running costs of a new car, especially gas costs and servicing, are lower than older cars. Newer cars, especially higher end luxury vehicles, have expensive maintenance, but trips to the mechanic are far more infrequent and more planned than with second hand vehicles. If you’re worried about being able to afford a new car, keep in mind that most banks give better loan terms to buyers purchasing new cars, since there’s more value in them if you default on your loan.
Pros and Cons of Second Hand Cars
The upside of a second hand car is that the upfront cost is much less. If you’ve got research skills and a good negotiator, you can end up owning a used vehicle and pay a fraction of the cost of what it was priced new. For example, if you by a car from the owner, you’ll avoid the markups and few fees.
The downsides of second hand cars are the increasing motoring costs over time – maintenance and fuel – as well as the potential unknowns of the vehicle. This is why it is harder to get financing for second hand cars; if you will need a loan to get the car, you’ll want to check with your bank before getting too far along in your research.
If you watch much TV, most used car are portrayed as total bombs that will leave you stranded alongside the road on a regular basis. That’s not the case – you can find many second hand cars that are good value and very reliable.
How to Choose
Every situation is different, but a couple of key criteria to help you consider the options:
- If you value reliability over price, you should probably get a new car.
- If you are able to do thorough research and on a tight budget, you should probably consider a second hand car.
- If you use your car infrequently, you should consider a second hand car.