Used cars and new ones have their advantages and disadvantages. The decision always depends on your financial capability, your taste and preference. If you are on a tight budget, and are willing to overlook some of the cons associated with buying a used car, then you can go ahead and make the purchase. If you have saved enough and only want your car brand new, then you are one of the lucky few. Here is what you need to know before you proceed to make that purchase.
- Used Cars Cost Less
Cars, unlike land, depreciates its value with time. The moment you drive a brand-new car out of a showroom, it loses like 25% of its value. It for this reason that slightly used cars cost way much less and can help you save a lot of cash. Imagine someone buying a brand-new Mercedes for $40,000, then using it for a year or two. If down the line he or she decides to sell that car, you can bet he won’t sell it for more than $15,000. That’s just a year where if you were to buy that Mercedes, you would have saved a clean $25,000.
- Avoid Tax for New Cars
New cars are always subjected to state sales tax. This tax increases the cost of new cars substantially. This tax runs into thousands of dollars that you can save were you to buy a second-hand vehicle. It is the same case when you are importing a new car. However, if you are buying locally from an individual, you avoid all that tax. You might even end up buying a very good car at half its initial price when it was new.
- Lower Rate of Insurance
The cost of insurance decreases as the car gets older. For a brand-new car, you will have to pay insurance for the first year based on the manufacturer’s price tag. This price is usually very high. A Honda Stream would cost about $30,000 when new. This same car a year down the line would be approximately $12,000. That is less than even have the initial price. The cost of insurance for the second year would be way less.
It is not always a guarantee that you find a used car in good condition. Some of them have been used in car rental companies. A car’s condition gets much worse when it has different handlers than if it only has one. Not everyone who hires a car will take care of it like its owner. If you end getting a car that is in a bad condition, you might spend more than you intended to with repairs. A new car is a sure guarantee of quality. You get to choose what you want, have some test drives and are sure nothing will go wrong since you are the very first driver. The cost of maintenance is always way lower for a new car than for a used one.