5 Reasons Why You Should Buy a New Car Instead of Used
Looking to replace your aging wheels or add another car to the family? Love the new car smell but afraid to take the plunge? It seems every bit of advice on the Internet tells you to buy a used car. Buying a new car, after all, will leave you absorbing all the depreciation. But I'm here to tell you there are plenty of good reasons to buy a new car. Not to mention all of the great new car deals out there to be had!
But before I begin, I ask you to consider my advice only in the context of your own means and situation. Don't overstretch your monthly budget for a new car. If you have bad credit, don't accept a loan with unreasonable terms. There is absolutely nothing wrong with buying a used car. And a used car is often the best option in tight situations.
1. Better Value Than in the Past
In terms of real money, new motor vehicle prices have actually decreased in the past few years. A look at reports of new car prices vs. inflation have shown that a dollar today will buy you more car than it used to. This is partly due to aggressive pricing in a down worldwide economy. But also more efficient processes and increased competition are keeping prices down.
- EU Report On Real Car Prices
New car prices fell 2.1% from 2009 to 2010 in the Euro Zone in terms of real car price.
At the same time, cars are more reliable, lasting longer, possessing better fuel efficiency, and holding their value better. It is not unreasonable to see a car last 15 or more years with proper maintenance. Used cars are becoming more and more expensive as depreciation isn't wiping out as much value as before. And when you do the math, depreciation really isn't that bad.
- Why New Car Depreciation Isn't So Bad
New car depreciation is one of the top reasons people buy a used car instead of buying a new motor vehicle. But if we look past cars as investments, we can see we gain a lot in return for depreciation.
2. Favorable Loan Terms
According to Bankrate.com, the average new car loan has an interest rate of 5.42% while used vehicles pay 5.98%. While these rates will certainly fluctuate, new vehicles almost always receive preferable rates.
But the best deals can be found from the dealers themselves. Nearly all of the major car companies have been offering rates of 0% on new vehicles for those with good credit. While the deals are only offered for a short period, they tend to happen cyclically; wait a couple months and a new one should appear.
Also, many loans and leases can be had with zero down-payment. While this could be more costly when financing with high interest, combined with zero interest it is a winning situation. Just be aware of the consequences of being upside-down on your loan and the benefits of gap coverage.
3. Get What You Want
If you're going to be spending thousands of dollars on a new vehicle, you'd best be happy with your purchase. I'm not saying you should pay for every little upgrade that you think is cool. But make a list of the essentials you need and shop for those.
Depending on your area, however, it may be difficult to find a used car that satisfies your wants. Sure Internet buying with sites such as AutoTrader or EBay Motors have made buying a car online possible. But there are obvious risks when purchasing a car you have never seen in person.
When buying a new car, you have access to the dealer's entire inventory and often the inventory of other nearby new car dealers. And if you still can't find what you want, it is always possible to order a customized vehicle.
One of the best parts about buying new, though, is you can often get many additional upgrades at no cost. Make it clear to the salesman that additional features on an in-stock vehicle are too costly and push it out of your price-range. Suggest you'd like to buy soon and will take your business elsewhere, and he might just give you the additional features for free just to ensure the sale. Just make sure you have researched the vehicles and are up to speed on negotiating techiques.
- Buying a new car? How much will a car dealer come down, negotiate, or haggle on price?
If you know what you're doing, and you can hold your cool, a car or truck dealer will come down quite a bit on the price of the vehicle. What is 'quite a bit'? Read on and you'll learn figures, strategies, and some things you probably didn't know ...
4. Special Perks
Buy nearly any new car today and you will also be eligible for some excellent perks. Many dealers are offering $1000 or $1500 cash back. Others are offering free maintenance plans. While others still are offering free roadside assistance.
Take a vehicle that already costs less and lasts longer than those in the past, and add on additional value increasing perks like proper maintenance, and these deals are looking sweeter by the moment.
Some special groups can also receive additional perks. For example, new college graduates have many discounts available to them including:
- Cashback Bonus
- Deferred Payments
- Better Interest Rates
- Financing even with limited credit history
- Roadside Assistance
- and more!
To qualify for recent graduate deals, you usually must have graduated in the past 2 years or will be graduating in the next 6 months, as well as proof of employment and other basic requirements. Toyota, Nissan, Ford, Honda, Suzuki, Kia, and more all have special college programs.
There are also rebate programs for the military.
- College Graduate New Car Incentives - Auto Loan Daily
Edmunds.com lists the best new car incentives for college graduates, including low auto loan rates and cash back incentives.
5. Peace of Mind
But perhaps the best reason to buy a new car is the peace of mind.
Knowing that your car has always been treated well. Knowing your car has received its maintenance. Knowing your car has fresh parts. Knowing your warranty will protect your car. Knowing you will get what you want.
The list goes on, but the reason is clear. Car buying can be a long and stressful experience. But buying new can reduce or even eliminate some of the hardest parts.