Maybe you’re looking for a vehicle, and you’re unsure if you should buy a new or used car. But before you walk into a dealership or start shopping online, know that there are pros and cons for each option to consider. New cars tend to be more
expensive, but you may be able to get exactly what you want. A used car could save you money, but you might have to compromise on features and worry more about maintenance.
There’s no getting around it — car shopping can be stressful. Even before you sit down to haggle on the price of a car, you’ll need to decide on the make and model you want and whether you should buy new or used. For some people, picking
out a car and deciding whether you want to buy new or used can be an easy decision. Some prospective buyers may be focused on saving as much money as possible and would never consider buying a new car. Others may want to pick out the exact vehicle
of their dreams and like knowing that they’re the first and only owner.
There are also many people who might be up for either option but want to know the pros and cons of buying a new versus a used car.
Benefits of a new car
A shiny new car can offer the latest bells and could even come with a warranty and roadside assistance — giving you peace of mind that you may be covered should you be met with certain car troubles. Let’s take a look at a few other major pros
of going with a new car.
Capitalizing on financing offers
Dealerships may offer new car buyers special financial incentives, like cash back or 0% financing during a promotional period. In most cases, if you
must have a very high credit score to be eligible for these special offers. Some dealerships may offer special promotions on certified pre-owned vehicles.
When you finance with WKFCU, you get the same rates for new or used vehicles, plus a lot more.
Customizing your car and getting the latest technology
One great perk of buying a new car is customization. If you want a specific color, interior or features, you may be able to tailor a vehicle to your liking and then order it through a dealership. Buying a new car might also be the only way to get the
latest tech features.
Getting comprehensive warranty coverage
New vehicles often come with a bumper-to-bumper and powertrain warranty, along with roadside assistance. These warranties can help assure buyers that qualified repairs may be covered. If you’re considering a used car, a warranty isn’t necessarily
out of the question. Cars that are only a few years old with low mileage may still be covered by a type of manufacturer’s warranty.
Paying less for repairs and maintenance
A new car’s warranties may cover many types of common repairs. In contrast, if you buy a used car, you might want to start a repair fund. Even cars known for their reliability can break down at times, and if you’re lucky enough to have a warranty
that covers certain issues, it still probably won’t cover everything.
Benefits of a used car
Buying a used car could save you money. Here are a few benefits of buying a used car.
A new car depreciates, or loses value, as soon as it leaves the dealer’s lot. In fact, it could lose 20% or more of its value within the first year, depending on the make and model. This might not matter to you if you plan to own the car for
a long time. But if you finance your car and plan to sell it in the next couple of years, you may find that you aren’t able to sell it for enough to cover what you owe on your car loan. Used vehicles generally don’t depreciate as
quickly as new vehicles do. After the first year, depreciation of used cars can slow to around 9% to 12% each year for some models.
Here’s the big one: If a brand-new car is worth about 20% less after the first year, why not buy a car that’s almost brand new and potentially save some money? While many people don’t immediately sell a car after buying it,
you can often find vehicles that are just 1 to 2 years old. If you go this route, you might pay less for the car — and might save on auto insurance, too. Lower-priced cars are typically less expensive to insure.
Next steps: Shop and compare
There are pros and cons to buying both new and used cars, and what you decide on may come down to your personal preferences and financial situation.
Your credit union is here for you before during and after the car buying process.
Rates as low as 2.99% APR* and 90 Days No Payment
(Partially reprinted from creditkarma.com)
*APR - Annual Percentage Rate
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*APR = Annual Percentage Rate
*APY = Annual Percentage Yield
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