With tax season upon us, many people are preparing to make major purchases with their refunds. One of those purchases may be a new or used car. Depending on who you ask, there are bound to be plenty of opinions on which gives you more bang for your buck. While either choice can be a gift and a curse, it still begs the question, “Which is the better purchase?” Let’s take a look at the pros and cons of new and used cars.
- cheaper insurance
- less commitment
- less choice
- could be lemon
- unknown car history
Used cars can be as cheap as $1000 (or lower) to upwards of $8000 (or higher). Either way, that is a far cry from $20000+, making used cars easier to save up for. If you buy a used car straight out, your insurance will be cheaper as you can opt to not have full coverage. By buying the car out, you side-step the finance companies and charges that run up the price. On the flip side, with used cars it’s more of a “get-what-you-get” situation. Poor research, impulse buying and shady dealers can turn a used car purchase into a nightmare. Always get a report of a used car’s previous owners and accidents before you buy.
- better features
- no previous owners/drivers
- full warranty
There’s nothing better than that new car smell. If you’ve got the credit and the money, you can trick your new vehicle out with the latest fancy tech as well. The manufacturer even offers a full warranty for a certain amount of miles or year ensuring that any major repairs will be covered. This is comforting knowing that it will be you and not a previous owner running up the miles and wear and tear. All of this comes with a price…a $30000+ price tag. Another big drawback is depreciation. As soon as you drive your brand new whatever off the lot, the value of that vehicle drops dramatically.
In the end, both sides have pitfalls that anyone can fall into if they don’t do their due diligence to collect as much information as possible. Know your budget and long term commitments before you set foot on any lot, used or new. Armed with information, you’re sure to make the right purchase, the first time.