Pros & Cons of Buying a New vs. Used Vehicle
Life is all about making decisions. And that couldn’t be truer than when buying a new car. From the color and style of the vehicle to whether you want the latest tech or fuel-efficiency, car-buying is filled with choices. One of the greatest decisions you’ll have to make is between buying a new vehicle or one that’s new-to-you.
Deciding between buying new or preowned is one choice that people tend to go back and forth with the most. Both options have pros and cons, so it’s important to consider all possibilities before heading to the dealership.
Buying A New Car
- New car smell and feel. There’s no feeling quite like driving away in a brand-new car. The pristine inside and intoxicating new-car smell 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.
- Cost. New cars typically come with a higher price tag when compared to used vehicles. All those bells and whistles increase the price and usually 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
- Lower cost. The most impressive “pro” of 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 that luxury car you’ve been dreaming about. 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.
- Damage or wear-and-tear. With a preowned car, you’re not going to 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 don’t 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.
It’s important to remember that buying a car is a financial investment. The true purpose is to get you from point A to point B safely. However, purchasing a vehicle can become as much an emotional decision as a financial one. Afterall, the cars people choose to drive are often a reflection of them – from the style down to the color.
Take time and explore all your options. Find that perfect vehicle that fits you, but also fits within your budget.
We’re Here to Help!
One of the first decisions you have to make when buying a car is choosing whether it will be new or preowned. There are many pros and cons of each option and many financial considerations to explore.
As your credit union, our team is here to help you run numbers on different scenarios to ensure you’re making the smartest financial decision for your unique situation. To speak with a member of our Lending Team, please email us at email@example.com or give us a call at 202-479-2270.