If you’ve been browsing ads for a new car, maybe you’ve wondered if you also ought to consider buying used. But if you begin exploring both new and used cars, you may start to get dizzy from all the choices.
So, let’s take a look at the pros and cons of these two most basic types of automobiles to help you decide which way to go.
Benefits of buying a new car
The biggest advantage to buying a brand-new car is that it will cost you less to operate and maintain during the first few years of ownership. All new cars are covered by a bumper-to-bumper warranty for at least three years or 36,000 miles, which means there’s no cost to you for nearly any problem that occurs during that period.
Your only costs, other than the car loan, are for regular maintenance and to replace wear-and-tear items, such as brakes and wipers. Some automakers offer free maintenance during the warranty period, which further reduces your expenses.
Downsides of a new car
The biggest downside to buying a new car is the cost of the car itself. Brand-new vehicles cost more. And, they depreciate quickly in the first few years of ownership, especially during the first year.
As a result, most new car buyers, particularly those who do not make a down payment, find themselves upside-down, with a car that is worth less than what they owe. This can be a big problem if the car is totaled in an accident or if you decide you want to sell the vehicle before it’s paid off.
The pluses of purchasing a used car
Used cars have two major selling points:
- They’re always cheaper than if you were to buy the same vehicle new.
- They’re far less likely to put you upside-down in a loan for long — if that happens at all.
You might find a barely-used car with some of the bumper-to-bumper warranty remaining, which will help save you from repair costs.
Used cars also are cheaper to insure.
Disadvantages of used cars
The biggest negative to buying used is that you won’t know the car’s full history.
Services offering a history report based on a car’s vehicle identification number, or VIN, can provide some information, but those are not foolproof. It’s possible, though maybe not likely, that you could end up buying a car that was in a serious accident, sustained major damage in a flood or is even stolen — despite a “clean” vehicle history.
Here’s another drawback: As cars age, they tend to require more expensive repairs; buying a used car increases the chances you’ll face those fixes sooner.
Once you’ve made your decision whether to go for new or used, search auto loans here at Bankrate.