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Should I buy a new or a used vehicle?
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Deciding between a new or used vehicle depends on the automotive market and personal preference more than anything. There are advantages and disadvantages in buying new and used cars, but this article will help make your automotive buying decision a little easier.
New car buying advantages:
Better financing options - Lenders prefer to finance new vehicles, and they're willing to offer more buying power, longer terms, and better interest rates on new vehicles. Why do lenders prefer you purchase a new vehicle? The warranty. If something goes wrong with the vehicle, you can get it fixed, and it's not that big of a deal. On the other hand, some buyers are willing to let a note go bad on a broken down, used car that is inoperable and out of warranty.
If you have negative equity in your trade, new cars are easier to finance. The new car rebates usually help eat up some of your negative equity, and the lenders will usually loan up to 130% of book value.
New car warranty and roadside assistance - There are a lot of auto makers that are offering 5 year/100,000 mile warranties and this is an attractive proposition to many buyers. Also, these vehicles come with roadside assistance that usually includes tire repair, emergency gas, towing and more.
True cost, competition, and rebates - The automotive industry is very competitive and even more so when we're talking about new vehicles. More than likely, there are a ton of dealers that all have the exact vehicle you're looking to buy, and this is a good thing for the buyer. Competition drives down your cost. Then, you have to take into account the different auto makers fighting for your business and throwing out factory rebates to lure you to their side. Now on to true cost. New vehicles come with an invoice, and most dealers will show you this upon request, as opposed to used vehicles, in which you have no way of knowing what the dealer really has tied up in that vehicle.
Hey, it's NEW - You're the only owner and you know it hasn't been mistreated. Oh, and that new car smell!
Used car buying advantages:
You get more car for less money - Everyone knows once you drive the vehicle off the lot, you're going to take a hit, so a lot of buyers buy used and let someone else take that hit.
The warranties and financing options are getting better - Now days you have a lot of auto makers offering used vehicles under their "Certified Pre-Owned" umbrella. Along with a catchy title comes better inspections, warranties, and financing options.
Free or low cost aftermarket accessories - The dealership doesn't usually care if there is window tint, a custom Kenwood CD player, or a bed liner on a vehicle they're trading for. Since they didn't pay for it, they usually don't put too much value into these upgrades, and they can be yours for almost nothing.
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