New Cars Versus Used Cars
New car vs used car. Which car is right for you? Think about the following.
Owning a brand new car is brilliant and it gives one a feeling of success. But financially speaking, it makes more sense to buy a used car or second hand car. The minute you put your ass in the new car and drive off the lot, it loses a great part of its value usually a couple of grand. This is because your car is new no more.
New cars lose almost half of their value within 3 years, If it is a luxury car mabey a bit more then depreciation starts to slow down slightly.So why not buy a pre owned car and let someone else to take that depreciation hit?
The previous owner will have absorbed the steepest part of the depreciation. At that point the costs of owning and operating the car will be reduced. The money you save on depreciation will surely go a long way.
Another benefit of purchasing a second hand car is lower cost of purchase. By buying a second hand car you pay less. You will also spend less on financing costs, insurance premiums, registration and licensing fees.As someone else has already paid these fees and you are only paying what the car is worth now.
As with everything else there are a few downsides to buying a used car. There are more chances for costly repairs. You may have to do major maintenance on your car, including replacing tires, battery, brakes, muffler, and perhaps even the transmission all of these would be guaranteed on a new car.
A used car is usually less reliable. You dont know exactly what youre getting into and how the last owner treated the car until you buy the car. However, every situation is different and some used cars may actually be far more reliable than some new ones.
If you can afford to pay cash, go the new car way. Enjoy the feeling of knowing youre the first owner of a new car in mint condition. Nothing can replace that feeling of success or that new car smell.
Otherwise do not reach higher than you can reach. Practice financial prudence. Save your money and content yourself knowing that one day you will be able to afford and buy that dream car. One day when money is no object.
Me I will always go for the used car from a reputable car dealer, but im a bit of a skin flint and would hate the thoughts of giving all that money to the banks, insurance companies and government.
Tags: used cars