Buying New vs Used
You’re ready to buy a new vehicle. But now comes the big question—Should you buy a new or used car? It can be a challenging decision. A new SUV, sedan, or truck is tempting. You get zero miles, excellent interest rates, and many enticing features not available yet in older models. However, the value of your purchase drops quickly. So which is the better choice? Keep reading to learn about buying new vs. used.
Reasons to Buy a New Sedan, SUV, or Truck
A new vehicle might seem like a bad idea because of the price. However, the higher price comes with a few advantages. For example, when you buy the latest model of your favorite, it comes with perks. New cars, trucks, and SUVs come with a warranty. Combined with an extended coverage plan, you could potentially pay for zero repairs throughout the lifetime of the loan. However, when you consider the used vehicle, you might have none of the manufacturer’s warranty left, which means you pay for all fixes or have to purchase extended coverage, which may leave you with out-of-pocket costs.
Additionally, your loan might not be as much as you think with the lower rates for new vehicles. With a trade-in and down payment, it’s possible you’ll only pay a little more for the latest model over a used one.
Along with those savings, you get access to the latest tech features and model updates. People buy a new vehicle because of these options, such as cooling leather seats, dual-zone temperature control, HD radio, and a Wi-Fi hot-spot. Also, when you choose a brand new vehicle, you get all the safety bells and whistles. Insurance on a new vehicle, especially with a loan, can get expensive. These safety features, such as collision alert, automatic braking, lane-change assist, and lane departure warnings, can help lower insurance a little, possibly evening out the rate increase.
Reasons Not to Buy a New Vehicle
The top reason a new vehicle might not be right for you is the overall expense. It can cost over $30,000, and that’s before you add the features you want. As a result, a new car losses its value quickly. In addition, as the vehicle’s first owner, you take the depreciation hit. Most new vehicles lose nearly 10% in the first two months and about 15% each year. These numbers mean a five-year-old truck, SUV, or sedan is worth 40% of the original purchase price. After that, depending on how well it was taken care of, it can depreciate faster.
Reasons to Buy a Used SUV, Truck, or Sedan
Some consumers prefer to buy a used vehicle. They want more features without paying for a brand new, top-of-the-line model, which can top $50,000. They won’t get a new car discount or a lower interest rate. But they get an affordable loan on a slightly used vehicle that will depreciate slower than if they didn’t wait a year or two to purchase it. Another benefit is sales tax. When the sedan or SUV’s price drops from $50,000 to $25,000 in a couple of years, you only pay half the sales tax. Another cost consideration is insurance. It’s much more expensive to insure a new car. Even with a loan, you’ll most likely pay less when you buy a used car.
Reasons Not to Purchase a Used Vehicle
You’ll have an underwater loan for the duration of the term. You’ll pay much more than the car is worth by the time you settle the debt. To prevent owing money if something happens to your vehicle, such as it’s stolen or totaled in an accident, you’ll need GAP insurance, which is another charge. Also, you’re not the only owner. You’re taking out a large loan on a car or truck that you’ll never know the genuine history of, despite the CarFax report. While many people are okay with this, some aren’t comfortable with the thought of the unknown.
In addition, you won’t get some of the newer features you want, such as safety options that make you feel more confident behind the wheel of an expensive vehicle. However, the addition of automatic braking, collision alerts, lane-change warnings, and high-definition backup cameras can improve your experience. Plus, comforts, such as leather seats, active noise cancelation, and HD radio, can make every drive a dream.
Are you ready to choose? It might be easier to decide by visiting the dealership in person. Stop by Herrin-Gear Chevrolet in Jackson, MS and take a new and used Chevy for a test drive and see which option feels best. Our sales associates are happy to work with you to find the best fit for your needs and budget.