Buying a car is a considerable financial decision, and we all want to get what’s best for our family and our finances. With over 1.2 billion cars on the road already and the number set to climb, used car sales are three times higher than new sales in developed countries. Balancing the quality and cost of a car can be delicate at any price point, particularly when you’re not much of a ‘car’ person. Are you looking at used cars online, but you’re not sure if it’s the right move for you? Here are a few important things to consider when it comes to buying a used car versus new. It’s all about what’s most important for you and your family.
1. Depreciation and cost.
Depreciation is one thing dealers never tell customers down at the car yard. In fact, a car will lose a fifth of its value the moment it’s purchased, and around 40 percent in value in just the first year. By the third year, if you average 10,000 miles of driving annually, the average car would have lost 60 percent of its value. Some cars will depreciate slower if they have a high fuel economy, modern features, or are part of a model range that only updates every few years. A used car, however, would have already done most of its depreciating before you’ve bought it, meaning you’ll be paying much less and won’t need to take the hit when it’s time to on-sell or scrap.
Many new cars come bundled with the latest safety and entertainment features, like advanced airbags, autonomous braking, automatic headlights, and in-car touchscreens and entertainment speakers. If you want the latest Apple CarPlay system or a rear reversing camera, then you may have to wait some time for these features to filter through to the used car market.
Many dealerships now let you completely customize your car from the ground up, including the trim, color, transmission and engine options. You can pick and choose the features that best suit your lifestyle and tailor a car fully to your tastes. However, your options are going to be more limited when purchasing used, and you might not get the color you want the most out of what’s available on the day.
Some older cars can be expensive to insure for third-party damage, but on the whole, a used car is going to be much cheaper to insure than a new car, generally as it’s worthless. You can drop collision and comprehensive coverage, which will cover the cost of repairs. Used cars are generally less desirable for thieves, which will also have a little more from your premiums.
5. Warranty and peace of mind
New cars are generally going to be more reliable than used. If a new car breaks down, then you’ll most likely have roadside assistance and a free repair service as part of your up-front costs, which is a great relief should the worst happen! A used car, however, will probably have a less comprehensive warranty and may only cover faults for 12 months after purchase. This is offset by the much lower initial price of purchase, though, freeing up more money for repairs.