Transportation is crucial in daily life. Nothing can beat the mobility and freedom that riding your private vehicle offers. Having your own car is a worthwhile investment that can serve you for many years to come. However, buying a car can be an intimidating process, especially for first-time buyers. Luckily, we have some tips below to help you out.
Buying a New Car: Brand-New or Used?
Purchasing a new car can be daunting and challenging, especially for your pocket. Although brand-new cars are still the standard of auto purchases, we can find a lot of good deals offering used vehicles. If you’re stuck between getting a brand-new car or a used one, you’re in the right place.
In this article, we’ll discuss the differences between purchasing and owning a brand-new versus a secondhand car:
The most significant factor in getting a secondhand car is its relatively low purchase cost as compared to a new car. If you’re looking into saving money on your car purchase, it’s worth considering used cars instead of brand-new cars.
Brand-new cars depreciate at a surprisingly rapid rate. Starting from the date you purchase a new vehicle, it can lose its value by up to 40% after three years. By buying a used car, you can dodge the depreciation bullet as its previous owner has already taken the substantial hit for you, and your new-to-you used car may only be a few years old.
- Registration Fees
After purchasing a car, you have to put the vehicle under your name, thus requiring registration issued by your state. Many states—such as Texas, Utah, Illinois, Massachusetts, to name a few—charge a flat registration rate.
However, several states compute registration fees according to the vehicle’s age, including Idaho, Montana, and Oklahoma. Meanwhile, Arizona, California, Colorado, Iowa, Louisiana, and others have value-based registration fees.
If you’re situated in a state that acknowledges the car’s age or value, you can save more on vehicle registration fees with a used car.
- Insurance Premiums
Your car’s age and condition don’t always determine your safety down the road. Having car insurance is what gives you more peace of mind and protection from damage and liability. Whether you’re purchasing a new or secondhand car, it’s essential to factor in your vehicle’s insurance costs.
As a rule of thumb, new cars have higher insurance premiums as they have a higher market value and repair costs in the event of an accident, but this isn’t necessarily true in all cases. Newer models are equipped with more safety features than older models, thus its expected damage will be lower.
Contrarily, secondhand cars may have lower insurance costs, but their lack of anti-theft and safety driving features might put you at a disadvantage. Before purchasing a used car, see to it that the vehicle has no salvage history, and pick the right insurance coverage.
Always observe comparison shopping when looking for the best auto insurance deal. As much as possible, find ways to score auto insurance discounts.
Lastly, reliability is a heavily subjective factor that can vary from needs to preferences, but it’s still worth discussing. Regardless if your car is new or used, it should be something you can rely on for most, if not all, of your transportation needs.
For instance, if you need a car with plenty of passenger room for your family, it’s not justifiable to purchase a secondhand vehicle that can’t accommodate your passengers just because it’s cheaper.
There are scenarios where you’re better off buying a new car than a used one, so make sure to evaluate all factors that come into play according to your situation.
Are used cars just as good as new ones? There’s no one-size-fits-all answer to this question as it depends on your circumstances and options when buying a vehicle. With new cars, you have to be prepared to get hit with quick depreciation, but you’ll be able to choose your preferred car features according to your budget freely.
On the other hand, you’ll be saving a massive sum from purchasing a depreciated car, but it might cost you higher insurance premiums. Your options may also be limited, but you can still tweak and enhance your vehicle’s features however you’d like.
Most importantly, it’s paramount to be financially, physically, and emotionally prepared with your car purchase, whether you’re getting a fresh car or a secondhand one from the dealership.