This can be a daunting task for many first-time buyers. Opinions and comments coming from close family members, friends, car sellers, and polarizing online posts can cloud anyone’s judgement when it comes time for a big, or small, purchase. First off, buying a car should always be relative to one’s financial means, future endeavors, and exit plans if all goes awry; the last part is of the utmost important as the COVID-19 pandemic revealed that any American is vulnerable to the economy. Here is general information comparing the benefits of buying both a new and used car.
Pros of Buying a New Car:
Ease and flexibility are the two core points that attract the average American consumer. There is not as much headache when dealing directly with a dealership instead of going through extra hoops to purchase a used vehicle. The direct communication and ability to drive off the lot hours after walking into the building is a less stressful experience. The traditional process is one that most are familiar with and is optimal for many.
Additionally, more financing options, the newest technological adaptations, higher safety ratings, and the best reliable conditions are only a few perks to buying a new car.
Nearly 17 million Americans bought a new car last year amidst the pandemic so there is logic to this route if the situation is right.
Pros of Buying a Used Car:
Ranging from the high school student trying to save up for college to an adult minimalist, purchasing a user car is financially viable for most people. The downside will always be the gamble that the car will be functional. Fortunately, the greasy caricature of a used car salesman is gradually fading away and institutions are checking for major and minor impact. Reliability for used cars are more favorable in comparison to the past couple of decades due to younger generations focusing on minimalism and economic uncertainty.
It is always important for one to check the vehicle themselves as well. This should be inspecting the vehicle for any damage that is listed in a description, test driving the car to spot any minor deficiencies, and clicking every button in the car to see if everything is functioning properly. Nothing will be perfect. The title “pre-owned” is evident in itself. Expectations should always be curbed as the picture or description might not always align with what is being proposed.
Car Depreciation Affects Used and New Cars:
There is a common phrase, or an inevitable axiom that everybody must come to terms with, that rings true for the average car buyer: “Your car loses value the second it leaves the lot.” Car depreciation affects both new and used vehicles, more negatively impacting the former. This is how fast car depreciation happens and continues to decline gradually over time; the value after the first year decreases from 20% – 30%. This does not apply to every model or make, but it is a good rule of thumb to follow to be financially conservative. None of this means that buying a new car, or any car, is instantly a bad purchase. The same applies to purchasing a used vehicle. Car depreciation does take a big chunk of the initial investment, but this does not mean it will be in vain or at a complete loss.
Personal finance is personal. Everyone’s situation is different when it comes to buying a car, new or used. This applies to anybody who is trying to sell their car. Priorities are going to be different as one person selling their car has more time as one other person might have the urgency to sell as quickly as possible. There are plenty of resources that help evaluate one’s car value. Upgrading to a new car, moving to another state, and needing cash liquidity are only a few reasons that contribute to selling a car. Additionally, there are a lot of nuances as having a car does not necessarily equate to having a car. Here is a link that helps answer general questions the typical seller tends to have.
Buying any kind of car should be an exciting experience as it may symbolize a fresh start or a completion in life goals. Selling a car should also have that same sentiment as it is a transition into the next step. Car decrepitation is the gray cloud that fogs the process but can be minimized to get the ultimate value out of one’s vehicle.