Owning your own car gives you a lot of freedom and mobility, but also carries a lot of responsibility. When going through the car buying process, one of your first decisions will likely be about whether to buy a new or used vehicle.
The Pros: When you purchase a new vehicle, it comes with a warranty and you may be eligible for great financing options and other dealer incentives. These incentives may include: low annual percentage rate (APR), low interest financing, cash rebates, and free scheduled maintenance. A brand new car is crash-free, which may make it more reliable. Newer car models also tend to have better gas mileage, advanced technology, and improved safety features.
The Cons: New cars are offered at much higher prices, which may limit your selection. Given the higher price tag, you may end up having to pay off your car over a long period of time with accrued interest. Also, as soon as you drive a new car off the lot, it will depreciate and continues to lose value, particularly within the first three years.
The Pros: Used cars generally cost far less than newer models. You’re also more likely to get a better deal because you avoid additional costs such as processing, preparation, and advertising fees. As long as the car has been properly taken care of and regular maintenance checks have been completed, a used car may be a great option for a new driver.
The Cons: When purchasing a used vehicle there can be fewer choices available depending on your budget. The warranty on a used car also has a few years on it, which means it will likely expire soon (if it hasn’t already). In addition, you could get stuck with unforeseen maintenance and repair fees if the car had not been properly taken care of.