When the time comes to buy a car, motorists have a few different options to consider. It is important that you take the time to find the best option, as buying a car is often the second-biggest financial decision an individual makes behind buying a house. The right option will depend on your situation and needs, but here is what you need to know about the costs surrounding buying new and used:
New cars come with a higher price tag, but there are a few advantages with this option. Usually, there will be more finance options available to you which can make managing the costs much easier. In addition to this, you also have the benefit of the manufacturer’s warranty in case the car encounters any mechanical or electrical faults, which can occur at any time during the car’s life. New cars also come with the latest and best technology, which can make them better value for money.
The major drawback of buying a new car is depreciation, which can be as high as 70% after just three years of ownership. This means that if you decide to sell the car down the line, you will be taking a large financial hit. This depreciation is key and should be carefully considered by all motorists.
In many cases, it is the smarter financial move to buy a used car. This is not only because they come with a lower price tag, but also because you will sidestep the biggest drop in value (especially if you buy a car older than 3 years). Other advantages are that it can be cheaper to insure a used car because it is not worth as much as a new car, which can save you a significant amount in the long run. One common argument against used cars is that they will not be as reliable and will need regular maintenance, but modern cars all have excellent build quality so they are more dependable than ever.
If you do decide to buy used, it is important that you navigate the used car market with care and always buy from a reputable dealership like Imperial Cars. This will give you crucial consumer protection and ensure that the car has undergone rigorous testing.
More often than not, it is the smarter financial move to buy a used car, but that is not to say that you should not buy new as it does have its own benefits. The key is to look at your situation and needs and then weight up the benefits and drawbacks of both.