Anyone looking to buy a vehicle faces this dilemma: “Should I get a new car or a used one?” And with cars being one of the biggest investments you’ll make, it’s a question worth asking.
Before you head to a local Covington Subaru dealership and pick out a ride, here’s an overview of the pros and cons of buying new or used:
BUYING A NEW CAR
THE PROS:
Low interest rates
With many lenders now offering auto loan interest rates as low as 5% per year, it’s never been easier or more affordable to buy a brand new car.
Warranties
A new car comes with warranties that last anywhere from 3 to 10 years, depending on the brand. If you encounter manufacturing defects during the warranty period, you won’t have to spend anything on repairs.
Latest technologies
Upgrading to the latest model means you can finally enjoy newer features you only dreamed about, such as a touchscreen navigation, satellite radio, or even internet access.
THE CONS:
Cost
A new car is considerably more expensive than a pre-owned one. People with a smaller budget might be priced out of buying a new vehicle given their high price tag.
Depreciation
The moment you drive a brand new car out of the car lot, it sheds about 11% of its value immediately. Over a five-year span, your vehicle will retain only about 40% of its original asking price.
Insurance
The rules of insurance are simple: the more costly something is, the more expensive it is to insure. And since you purchased a car at full price, you’ll pay close to the maximum rates to insure it.
BUYING A USED CAR
THE PROS:
Low upfront cost
Given how sturdily modern cars are built, even a five-year-old vehicle will remain roadworthy for years to come—and only costs you a fraction of a brand new one.
Take out a smaller loan
Since used cars cost less, you only need to take a much smaller loan. In fact, you may not even need to borrow money—many buyers just pay cash directly.
High-quality options
Most major car manufacturers have a certified pre-owned program, where traded-in vehicles are rigorously inspected and refurbished before being put on the market again. You can get cars in great condition for an affordable price.
THE CONS:
Wear and tear
Even the best maintained used vehicles will show signs of wear and tear. And if you experience major problems, chances are you won’t be covered by the warranty anymore.
Limited selection
Unlike new cars, you can’t pick the trim, accessories, or color for a used vehicle. What you see is truly what you get. So you might need to be flexible with your expectations when buying used.
Higher interest rates
Believe it or not, interest rates for used car loans are higher. This goes back to wear and tear—the older a vehicle is, the higher risk it entails in the eyes of the lender.
Whether you’re looking for a brand new or used ride, be sure to visit only a trusted Subaru dealership in Covington. For more helpful tips, be sure to visit Baldwin Subaru.
