You need a ride to get to work, to take the kids to school, and to run errands. Stretching each dollar to the limit is preferred, so it doesn’t matter if it’s a new or used car. It’s more about comparing costs and getting the best deal. Here’s what to know when buying a new or used automobile.
Cost Comparison: Buying a New Vs. a Used Car
What’s It Worth?
Depreciation is a concept that car buyers soon come to understand. A car loses a significant amount of value as soon as it’s bought and driven off the lot. Consider the first year’s wear and tear, and you could lose $9,000 off of a $30,000 ride. Have you done a cost comparison?
A similar yet used car would depreciate at a lesser rate. From this perspective, buying used is a better way to go. But it’s not that simple. Obviously, driving a new car is desired for a number of reasons. But, what’s driving a new car worth to you?
Today’s and Yesterday’s Used
Today’s used vehicle buyer is in a better position than those in prior decades. A car’s history can be traced and dealerships offer ‘certified pre-owned’ models of luxury vehicles, economical sedans, SUVs, and more.
Today’s used cars are more reliable and require less maintenance. Of course, no used car’s condition can compare with new. Have you done a cost comparison?
Movin’ On Up
On average, a used car costs less, so buyers could move up a notch when it comes to a more prestigious model or manufacturer. For example, a used Lexus may cost similar to a new Honda with the same features.
Diligent shoppers often find cheap car insurance rates for used vehicles, another reason to consider getting a better model. Getting a luxury brand of car, however, does raise the level of stress in the event of damage due to the higher cost of repairs.
Nothing Compares with New
A new car offers a lot of benefits. Firstly, a parent has peace of mind driving a new car with the latest safety features. Secondly, new car buyers have more finance options available to them.
Thirdly, a lot of advanced features are found throughout today’s newer cars. Lastly, it’s a bit easier to shop for a newer car since its condition is not under question. See a selection of Fiat 500 models for example. You may want to consider a cost comparison.
Who or What Do You Know?
A bit of mechanical know-how puts a used car buyer at an advantage. Moreover, if you have a mechanic in the family, it takes pressure off of buying a used car, for your relative can go shopping with you or help you address mechanical issues over time.
What is Certified Pre-Owned?
A certified pre-owned car is different from a used car. The former is refurbished, inspected, and then ‘certified’ by a manufacturer. Deals vary per dealership and manufacturer. Some believe that pre-owned was a way for luxury brands to reintroduce ‘used’ cars to the public.
Pre-owned is not to be confused with dealer-certified. When interested in any pre-owned or certified model, be sure you know who did the inspecting and provided the ‘certification.’ If buying pre-owned, you may be limited in your choice of color, model, mileage, etc.
Get the Vehicle History Report
In addition to checking Blue Book prices, get the vehicle history report of vehicles of interest. Sometimes a deal that seems too good to be true, could be. Even if a car looks great on the outside and inside, you’ll want to know about any prior water or fire damage.
Understand that a clear history does not mean a used car will not provide a new owner with problems. It’s just another step in a thorough buying process.
It’s estimated that the average person will have about 10 vehicles in their lifetime. That seems like a lot of investment.
When’s the next time you plan on shelling out money for a car? If you want this one to last for some time, then you want to get something new. If you just need something to get you by a period of life (college, med school), maybe you can get by with buying used until you get a better job or have funds to purchase new.
Used Cars Plus Repairs
Buying a used car is like buying a home. Even if inspections go well, you need to budget for unexpected repairs. If you plan on using the used car a lot, then you definitely need to set funds aside for unexpected wear and repair. In many cases, buying a car that will need repairs is still a better scenario. Compare payments and estimated repairs on a used car versus making ongoing payments on a new vehicle.
Marco Marlia is the CEO and co-founder of MotorK, the most important lead generation company in Italy for the automotive industry. He holds a degree in Economics, Financial Markets, and Institutions from Bocconi University of Milan, Italy. Marco Marlia is the co-author of the following books: Oltre Wikipedia (Beyond Wikipedia) and E-learning e Piccole e Medie Imprese (E-learning and small and medium-sized enterprises).