THE LOWDOWN ON BUYING A NEW CAR VS A USED CAR

One would always see finance advisors going recommending buying old cars over new ones. Now this is a universal agreement and there are reasons for that too :

1.       Costs of used cars are much less and with increasing rates on every single thing on this planet, being economic does not hurt anyone.

2.       The insurance on used cars is much lower than that of new cars.

3.       One can often make use of extended warranty on pre-owned cars if those cars were owned for a year or two and warranty on cars easily exceed two years.

4.       Rate of depreciation of cars is the highest in the first two years of ownership. For example : a late-model Honda Accord can be had for the price of a new Suzuki Swift, and a 3 to 4 year old Honda City, Mitsubishi Lancer or Maruti Baleno will go for close to the same price as a new Alto.

New cars fail to fulfil the above criteria. So used cars are often chosen over new cars when one makes a decision of buying a car.

But not everyone will choose a used car over a new one and for them value of a car matters much more than its cost. So even if the cost of a used car might be less, not always is that an issue, since people willing to buy a dream car would obviously care more for the value of the car rather than its cost.

Reasons why people would care for new cars more than used car when it comes to purchasing:

1.       When buying a car, one needs to make sure that the car does not break down soon after a little use. So buying a car, one knows is new and refined, gives him/her the confidence and reliability that the car is not to turn up issues pertaining to it. Also new car purchases often follow thorough vehicular inspections and test drives. So the confirmation for the quality of the car comes from that as well.

2.       Interest rates for new cars are often less than old cars and this turns out to be an important point of consideration when it is time for long term loans.

3.       Resale values of new cars is much higher than old cars and if one wishes to sell bought cars within a couple years of his/her ownership, this proves to be a highly lucrative idea.

4.       Gas mileage for new cars is a lot more than that of old cars and that is something that is worth spending more for because after all the yield and speed are what we all search for.

5.       New cars can be customizable – you can select the features you wish to be incorporated into a car to meet your needs which is not possible with old cars.

6.       Although old cars may cost less at first, but maintaining them may cost a lot more in the long run and that needs to be taken into consideration.

7.       Old cars depreciate at a lower rate than new cars and thus they offer fewer tax write-offs.