If you are thinking of buying a car, but you do not know whether to buy it new or used, here we are going to explain what you should consider before deciding to buy a car. Since this depends on your financial situation, the credit score you have and how much you could pay monthly for the vehicle, among other things.
You should know your credit score before buying a vehicle to evaluate if it is more cost effective to buy a used or new car. Auto dealerships provide excellent benefits and offers to those who have a good credit history. Likewise, if your credit is good (greater than 661) you could have more possibilities of obtaining a good vehicle with a low monthly payment.
According to BankRate, people with a credit score of less than 500 points would pay approximately $ 645 a month to finance a new car. In addition, they could expect to pay $ 10,000 more in interest than a person with good credit.
Because of this, if your credit score is not high, it could be more beneficial for you to buy a used car, so that you have a more comfortable monthly payment.
Another thing you should consider before buying a car is your finances. As If you buy a used vehicle, you should be aware that it may require repairs that insurance or warranties often do not cover. While new cars usually have an extended warranty, or the car dealer provides free or low-cost maintenance services for a specified time.
For example, when buying a new vehicle in Toyota, the dealer offers a maintenance plan at no cost for 2 years or 25,000 miles, whichever comes first. They also provide 24-hour roadside assistance for two years, regardless of mileage.
If you buy a certified used car, that is, from a car dealer, you can also receive some type of maintenance or warranty service for the vehicle.
After analyzing your credit and financial situation, you should consider the advantages and disadvantages of purchasing a new or used car. So you can choose the car that best suits you according to your needs.
Advantages of buying a new car
Some advantages of buying a new car is that you do not have to worry about its history, since you are the only owner who has owned the car. And if it has a mechanical fault or malfunction, from the factory, the company would repair the car at no cost. Likewise, new cars offer a longer or more comprehensive warranty if any part is damaged.
When buying a new car, it will have all the updated security systems and technology, since it is modern. You can read this article to know the best car brands: What are the best car brands?
Disadvantages of buying a new car
Some of the disadvantages of buying a new car is that it can be expensive if you don’t have good credit. Similarly, new car insurance tends to be more expensive. According to Auto Insurance, new car insurance is more expensive because the repair costs for these vehicles are more expensive.
Another disadvantage of buying a new car is that its value depreciates (falls) immediately after buying it. According The Economic Times, depreciation is when “the monetary value of an asset decreases over time due to use, wear or obsolescence”. After the first year, a new car loses more than 20% of its value, according to a report by CarFax.
Advantages of buying a used car
By buying a used car you could get a good vehicle at a low cost, without it losing its value so quickly. In addition, you can have auto insurance at a more affordable price.
Lendingtree explains: “Insurance premiums, if required by the lender, may be substantially lower than those applied to new vehicles. The age and model of the vehicle affect the cost of the premiums. ”
Disadvantages of buying a used car
One of the biggest drawbacks when buying a used car has to do with the history of the car. Since sometimes it is difficult to fully know the repairs that the car has had or the damages that it has suffered in the past. Because of this, you should be aware that the car could have some mechanical failures that you would have to deal with and invest money to repair them.
Some applications that can help you know the price and information of used or new cars are Cargurus and TrueCar.
CarGurus allows you to search for used and new vehicles, by price and model. With the application you can always stay well informed of price reductions in the cars that interest you and receive alerts or messages if the price changes. On the other hand, you can know the value of the car in the market and know what other people think of the vehicle. The CarGurus app is available for Androids Y iPhones.
With Truecar You can get complete information about the used or new cars that interest you. With the application you can search by brand, style or price and know all the specifications or history of the car. TrueCar is available for iPhones Y Androids.