Aside from buying a house, another expensive thing that you could do is to purchase a new car. Having your own vehicle offers a huge convenience, especially for work purposes. Those who live far from their office wouldn’t have difficulties with public transportation. Unless you are super rich and you don’t mind paying hundred thousands of dollars, you may want to consider buying a second hand car instead of a brand new car. Here are some of the reasons why.
The Value of New Vehicles Depreciates Fast
This is the top reason why you should consider purchasing a used car instead of a brand new one. The value of car will depreciate up to 60% only on the first four years of purchasing it. In fact, the minute that you used it, its value already depreciated by 9%! So if you decide to dispose it after a few years and purchase another one, you will not get the same amount or even close to what you paid for. If you buy a used car that’s over four years old, the depreciation value wouldn’t be as high from its selling price.
Brand New Cars Have Higher Insurance Premium
As a vehicle owner, you need to have your car insured. A new car would have higher insurance, which means additional monthly expenses for you. The reason for this is that insurance providers would spend more to have a new vehicle repaired or replaced in case of an accident. You will not be paying as much with a used vehicle.
The Down Payment and Monthly Rate is Higher
Aside from the higher premium on the car insurance, the down payment with a brand new car is higher than a second hand vehicle. This is also true with the monthly rate. So aside from your car insurance, you also need to have to use out of the pocket cash and add the monthly payment to your budget. Make sure to think about it as you may end up not being able to afford all the expenses associated with owning a new car, plus the maintenance. A second hand car would have a lower down payment and monthly payment. You may also find those that you could afford to pay in full so you don’t have to worry about the down payment.
There Are Used Cars That Are as Dependable as New Ones
One of the reasons why people prefer to purchase a new car is that they wouldn’t have any problems since it’s brand new. According to a study made, many vehicles can now still be good as new if maintained properly. For instance, a car that was purchased in 2011 and was maintained properly, could last for six to eight years without any major problem.
Many of the Latest Upgrades Aren’t Really That Useful for Everyone
New cars have the latest technology, which attracts many people on why they choose to purchase them. However, you may not even need all of these latest features. It’s more practical to find a used and properly maintained vehicle that has the features you really need like GPS.
Consider these factors when deciding if you would buy a new car or a used one.
Featured and 1st image by Helgi Halldórsson from Reykjavík, Iceland (Cars for sale) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
2nd image by User:Nfgusedautoparts (OpenStreetMap Wiki) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons