You are in the market for a “new to you” vehicle, but you are having trouble deciding if you should purchase new or used. How does one decide? You are torn between the luster and shine of a brand new vehicle off the lot and the appealing reduced sticker price of a used vehicle. Below we list a few questions to ask yourself before you make the used or new decision, and also weigh the pros and cons of each.Â
What Kind of Vehicle Do I Need?
Before you purchase your next vehicle, you should ask yourself what kind of vehicle do you need? If this is a one-man show, take a look at sedans or flashy sports cars. Are you starting a family? Perhaps an SUV is the perfect vehicle for you. Do you have a large family? Consider an SUV with a third row. Before the big purchase, make sure you are shopping for the best vehicle that supports your lifestyle.
How Much Can I Afford?
Another great leading question to yourself should be how much can you afford to spend on your new vehicle? You want to make sure you stay within your means. A good rule of thumb is to budget no more than 15% of your monthly income. Use the internet to your advantage to scout out pricing trends ahead of time.
What Should My Down Payment Be?
Another financial question to ask yourself is how much, if any, of a down payment you plan on putting down? The more money you put down up front, the less your monthly payment will be.
Pros of Buying a Used Vehicle
1. Cost: Used cars will cost you far less upfront than purchasing a brand new vehicle.
2. Less Lemon Picking: Dealerships now offer used vehicles with certified guaranteed warranties, covering parts and labor for an extended period of time.
3. Insurance: Your insurance premiums will be much lower on a used vehicle as opposed to new.
4. Affordability: Maybe your heart is set on that new imported luxury vehicle, but the price tag is just not realistic. Buying used will broaden your brand search.
Cons of Buying a Used Vehicle
1. Risk: With a used vehicle, your risk for repairs is greater.
2. Lack of Warranty: Most used vehicles will not come with a warranty, especially if purchased from a private party.
3. Interest Rates: These can be higher on used vehicles.
4. Technology: A used vehicle will not have the same updated technology as a new vehicle.
Pros of Buying a New Vehicle
1. Warranty: Any new vehicle will come with a manufacturer’s warranty, which will cover you, at no cost, over an extended period of time if any problems arise.
2. Customization: Consumers like the ability to choose colors, wheels and other features.
3. Technology: New vehicles come equipped with more technology than used.
4. Financing: New vehicles can sometimes come with more financing alternatives, including 0% packages.
Cons of Buying a New Vehicle
1. Depreciation: Your new vehicle will lose 9% of its overall value once you drive it off the lot. It will lose 20% of its overall value after the first year you purchased it.
2. Extra costs: With a new vehicle comes other costs. Your sales tax will be higher, as it’s based on the value of your vehicle. Your insurance rate will be higher. Your registration rate will be higher.
If you choose the used car route, look no further than Auto Action, the leading new used car dealership in the Phoenix area. Bad credit? No credit? No worries. Whatever your credit status is, we will make it work for you. Contact us today!
