Love that new car smell? Who doesn’t? Having and driving a new car can be a wonderful experience, but is it for you? There are many things to consider, and sometimes a used car is the way to go. It often depends upon your income, lifestyle, and a host of other factors. Wondering what to do in your situation? Read on for the pros and cons of buying a new car.
Pros of Buying a New Car
This is probably one of the biggest benefits to owning a new car, as the dealer will often even offer an extended warranty beyond the expiration date set by the manufacturer. Although most vehicles come with a manufacturer’s warranty that protects you and the car for around three years (or a set mileage), sometimes newer vehicles come with even more guarantees. Many specifically come with a 10-year long, 100,000-mile engine and transmission warranty. It’s always good to have a safety net, especially when considering the larger expense of a car.
This might sound elitist, but there is something to be said for the status of having a new car. And while it might not matter to some people, there are certain professions that benefit from such an elevated status. Whether you’re in real estate and are driving clients to appointments or you’re in sales and have the possibility of picking your boss up from the airport, a new car can make all the difference. The perception of value is important, especially in high stakes industries.
Unless you’ve been caught under a rock, you’ve likely heard that the interest rates set by the Federal Reserve have continually hit historic lows as of late. If you’re thinking of going the new car route, now could be the time for this reason alone. You’ve been eyeing that new Jetta for sale? Go for it.
The bells and whistles that come with and can be added on to new cars these days are about as hi-tech as you can get. From Internet access to Bluetooth adaptors, like this one from Jinserta, and built-in MP3 players to navigation systems and satellite radio, a new car is the preferred choice for those that have a love of technology.
Cons of Buying a New Car
This is the first and foremost of the cons, as it’s widely known that a car does not retain its value. In fact, as most experts will tell you, a new car loses value as soon as you drive it off the lot. When you buy a brand new car, you’re paying for the retail mark-up and as soon as you cruise off the lot, the car is only worth what it’s priced at wholesale. If you’re looking for a return on your “investment”, this is not the way to go.
Problems With Insurance Coverage
Car insurance can get pretty pricey, and the cost can be even costlier with a new car. Of course, there are other factors, such as the driver’s age, the vehicle, and the person’s accident record. However, the general rule of thumb is that the newer the vehicle, the higher the full coverage and liability insurance will be. And you won’t be able to drive off the lot without insurance, so it’s quite the catch-22.
This is a no-brainer as far as cons go, but if you’re on a budget, it’s a pretty significant one. A new car (especially if it’s fully loaded) is going to cost you far more than a used one in most cases, so if you’re living paycheck to paycheck, this is probably not the route for you.
However, keep in mind, by buying a used car that may be cheaper at the outset, you could eventually have more issues with it because there’s already significant wear and tear on the engine and other systems. So, it could end up costing you more money.
New vs. Old, the Choice is Yours
If you’re deciding between a new and used car, think about these pros and cons. Write down a list of your own, and then evaluate them. In the end, you’ll make the right decision if you factor in your salary, current situation, and goals for your vehicle.