Once you've made that decision to purchase a vehicle, you need to determine whether you want to purchase a new or preowned car. Unfortunately, that isn't always an easy decision to make, because both new and used cars have different advantages. However, it is a decision that you need to make before you go to the car dealership so that you don't get carried away and purchase a vehicle that you can't afford. So, before you decide whether you want to buy a new or used car, ask yourself these three questions.
Do You Have a Down Payment or a Vehicle to Trade In?
If you don't have a down payment and you don't have a vehicle to trade in, it may be easier for you to qualify for a new car loan -- if you have good credit -- because manufacturers often offer deals on new cars that that aren't available for used cars. For example, your car dealership could have several new cars that have a zero-down-payment financing offer. However, getting a loan for a used car almost always requires some form of down payment.
Do You Care About Taking a Huge Depreciation Hit?
Most people don't worry too much about the loss in their car's value until it's time to trade their car in for a new vehicle. However, on average a new car depreciates approximately 20 percent as soon as you drive it off the lot, and approximately 15 percent per year during the first five years of ownership. This means, if you purchase a new car that costs $30,000, you've taken a $6,000 loss as soon as you drive the car away from the car dealership, and after the first year of ownership, your $30,000 is only worth approximately $20,400. So, by purchasing a vehicle that's one-year old, you end up saving a lot of money.
Can You Afford to Maintain a Used Car?
Most used cars don't come with warranties to cover repair costs and maintenance, so you need to make sure you can afford to pay what it costs to maintain the car that you purchase. You can minimize the likelihood of purchasing a car with mechanical issues by having the car thoroughly inspected before you buy it, but you'll still be responsible for maintaining the vehicle. So, when you're determining whether or not you can afford a used car, consider the amount of money that it will cost you to maintain the vehicle, as well as the cost of the car payment and car insurance.
The fact is, there are several benefits to buying new cars, and there are several benefits to buying used cars. Buying a used car will save you money upfront, but it might not save you money in the long run. In order to decide whether you should buy a used or new vehicles, you need to consider what you can comfortably afford, as well as the features you want your new ride to have.
For further assistance, contact a local dealership, such as Bob Sight Independence Kia.