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Buying A New Car Vs Buying A Used Car

New or used? Just because you can budget to buy a brand new car does not mean you should not also consider the option of a second-hand model. Both options have their advantages and disadvantages.

Buying A New Car Vs Buying A Used Car

Buying new

The great advantages of buying new, of course, are getting all the latest mod-cons, the peace of mind of the full length of the warranty, and the knowledge that you’re unlikely to ever run into mechanical problems.

On the other hand, all of these can be expensive luxuries.Cars depreciate in valuearound 40% in their first three years, which means that if you buy a new car for, say, $50,000, with the intention of upgrading again in three years’ time, you should expect to make a $20,000 loss.

Buying used

If you are considering purchasing second-hand, someone-else’s loss can be your gain. And you need not resign yourself to driving a bomb: especially with business and fleet resales, second-hand late-model vehicles are increasingly available, sometimes even within a few months of being new. As the steepest depreciation happens the moment a car is driven off the shop floor, a second-hand car that is as new as possible can be a great way to get more for less.

Of course, if you choose something older, you’ll lose out on the surety of mechanical soundness and extent of the warranty. Weigh up how much these considerations are likely to add to the running costs, and also factor in the lesser fuel efficiency of older cars. The immediate savings of buying used might not be worth it in the long run.