One of the biggest questions people ask themselves when they’re looking to buy a new car is whether to buy new or used. There’s no simple answer to this question and the best way to summarise the answer is: “it depends”. It depends on your budget, how much money you have, what your credit rating is like, how long you intend to use the car and what kind of requirements you have. Regardless of whether you choose to buy new or used, it’s possible to get a car loan to help finance you. Many people have a fear of finance but it can be a really efficient way to build up a great credit score as well as keeping your spare money for any essential expenses that pop up.
If you want an indication of how much a car loan will cost you over the course of the loan, check out this handy tool from IMB car finance that helps you predict the total cost.
What are the Advantages of Buying New?
One of the biggest advantages of buying new is that you’re the first person to own the car. That might seem obvious; as it’s much nicer to drive a car that is perfect on the interior and exterior with no cosmetic damage, but the real advantage is that you know the service history of the car and whether it’s sustained any damage that might be hidden under fresh paint. There’s nothing worse than buying a secondhand car, only to find out that it hasn’t been properly taken care of or that there are a lot of hidden problems. A friend of mine wound up buying a used car that was actually two different cars stuck together, which meant if she had a crash it was likely to crumble in a way that was likely to be very dangerous.
What’s the Advantage of Buying Second Hand?
There are some people who love to buy a new car every couple of years – this is an expensive way to live, however it can be a great way to purchase an affordable, relatively late model second hand car. It has been said that new cars depreciate around $100 per week, every week, for the first three or four years. That’s a lot of depreciation. You can use this to your advantage and buy a car that’s 3-5 years old and has already done most of its rapid depreciation. You’ll save considerable money but still have a relatively new car. If you’re going to go down the secondhand car route, make sure that the car has a complete service history, that you get the car thoroughly inspected and, if applicable, get a warranty through the dealership.
It’s important that you think of what the car will cost you over the length of time you have it. Buying a new car might be a bigger purchase initially, but over the course of the life of the car you might save money as you’re not having to spend as much on repairs, maintenance, etc. Map out how long you plan to have your new car and work backwards to see what option you think will offer you the best value.
Do you prefer to nab secondhand bargains, or are you someone who prefers to buy their cars new? Share in the comments below.