Buy a New or Used Car?
Price
Should you buy a used or new car? There are pros and cons with both. The obvious difference is price. The moment that new car is driven off the dealership lot, its value drops a thousand dollars or more immediately. As the years go by and miles accumulate, the car keeps depreciating in value. Buying a used car can save you a considerable amount of money, allowing you to afford a car with more features, such as leather seats, power everything, premium sound system, etc. Suddenly that luxury car you've had an eye on is attainable if you buy it used.
If you want peace of mind and can afford the price of a new car,
that may be the best option for you. Buying a new car just for
the new car smell is not a good idea, and if you receive a mediocre/bad
interest rate coupled with a low down payment, your car's actual
value will be less than the loan amount(see gap insurance). To
get the best loan rate possible for your new car, we recommend
Capital
One Auto Finance.
With Capital One, you can apply online and get pre-arranged financing
with low rates.
Warranties
A new car also comes with a warranty and is less likely to break down, but it can happen. Dealerships love to hock extended warranties for their cars. Ask yourself why they love selling them? Because they love making money off of these extended warranties. Car dealerships are middlemen when they offer extended warranties, adding their own markup to make more money off of you. Extended warranties can be a good investment, but do not buy a warranty from the dealership. Buying your extended warranty straight from the source can easily save you hundreds of dollars. Warranty Direct is a leading direct marketer of extended automobile warranties—a wholly owned subsidiary of one of the oldest and largest vehicle warranty and service contract firms.
While a used car won't have the full original warranty when it was new, it may still last months, even years. You may be surprised how many 1-3 year old cars in pristine condition are sitting at dealerships with a nice chunk of their original warranty still in tact. Manufacturers and dealerships now offer certified used cars, which are said to pass a series of inspections. These certified used cars also come with better warranties. The downside? Being certified boosts the price of that used car, sometimes by thousands of dollars.
Buying a used car can be risky, as you may not have a warranty, or the original warranty may expire in a few thousand miles. If you buy your used car at a dealership, they usually offer a 30 day/1,000 mile warranty or something similiar. Within that warranty period, it is imperative to look over every inch of the car for defects. Take it to a trusted automotive shop and tell them to give it a thorough inspection. Check for leaks, inspect the transmission and brakes, etc. Unfortunately, unexpected mechanical breakdowns can happen at any time, so you should at least shop around to see how much an extended warranty would cost for your car (we recommend Warranty Direct). One major repair typically costs more than the total price of the extended warranty.
Used Car Vehicle History
It is also imperative to check a used car's history for any accidents,
false odometer readings, theft reports, and flood damage. Learn
about your vehicle's history by ordering a CARFAX Vehicle History Report.
Return to Choosing the Right Car
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