A cost comparison between new and old cars can give you perspective about the savings to be had with buying a used car. It all comes down to your financial situation and your needs. If a used car serves your purpose and saves money, then it’s worth considering.
According to a report by the National Automobile Dealers Association, the average American buys a car around 13 times during a lifetime. The cost of a car averages to $30,000. Even if you chose to a car that was just three years old, you’d save more than $125,000 over all the purchases. Depreciation sets in the moment you purchase a car. For a new car, by the end of the first year, a car worth $30,000 is shorn $9,000 of its showroom price. This happens because of wear and tear, and the miles that register on the odometer. Doesn’t make a difference so long as you’re the owner, but when you put up a used vehicle for sale, you learn quickly about how depreciation works. A new car, purchased for $30,000 will sell for $21,000 after the first year and then $15,000 after three years. A used car that you purchase for $15,000 will sell for $10,000 after three years. This sets you back by only $5,000.
Of course, driving a new car is a totally different experience from driving an old one. And if that matters to you and you can afford it, then go for a new vehicle. Buying a new car is relatively easier. You don’t have to worry about the condition of the vehicle; it is presumed to be first-class. You’re buying a brand new product. You can avail loans easily for new vehicles and these come with manageable interest rates. Repairs are covered under warranty that may be valid for three years. Bargaining, incentives offered by dealerships and manufacturers, and soft loans mean that a new car will cost less than what the sticker price says.
Ultimately, it comes down to what you want and your budget. Use a car loan calculator to learn about the difference in monthly payments between new and old cars.
Another important thing that goes in favor of new cars is that many brands don’t depreciate much, they hold on to their value. So, if you choose an automobile with a low depreciation rate and you feel that the price you’ll finally pay for this new car isn’t much higher than what you’d pay for a used one, then a new car makes sense in your case.
But if you choose to go for a used vehicle, then you’re probably making a wise decision. Used cars are dependable; it’s not like you’ll be bringing home a problem. Today, cars can travel for up to 100,000 miles before the need for major repairs arises. In short, cars today are reliable. The engineering is of good quality and the gaps between regular maintenance such as tire rotation and oil changes are longer than what they were a decade back.
There are other advantages to buying a used car. A vehicle that costs less to purchase will cost less to insure. You may totally forego collision and comprehensive coverage – these cover the cost of car repairs.
With each passing year in the age of a car, the cost of registry lessens. Since you are saving a good deal on used cars, 30% and above, you can choose an otherwise expensive model – a luxury vehicle.
Ultimately, it comes down to what you want and your budget. Use a car loan calculator to learn about the difference in monthly payments between new and old cars.
