Buying a car is not a decision you can take lightly. You must consider many factors, such as the cost, performance, loan amount (if you’re taking a loan), and the supplier, to name a few. Among these considerations, perhaps the most crucial factor is whether you’ll buy a new or used car. Not only does it affect the cost, but it also influences performance. So, which is the right option for you?
To answer that question, you must first understand what each option offers, and what better way to do that than to look at their pros and cons. Let’s start with the pros of buying a used car.
Used Cars: The Pros
1. Used Cars Are Easier To Find
Used cars are statistically more commonly bought than new cars. In 2018, around 17 million new vehicles were sold, while used vehicle sales were over 40 million. The statistic is roughly the same in 2019 up to the present. This statistic shows that there’s a high demand for them. Hence, it’s safe to assume the supply is likewise abundant.
Car dealerships like Walla Walla Toyota are a testament to this as they have more used cars listed than new cars if you look at their inventory. In short, used cars are easier to find.
This characteristic of used cars is quite handy if you urgently need the car since you’re more likely to find the specific model you’re looking for. Even if you don’t have a specific car model in mind, you at least have more options to choose from in terms of cost and performance.
2. You Can Customize A Used Car Freely
When you first buy a new car, there’s typically a warranty period of three to five years. Within this period, it’s advisable not to customize or mod the vehicle yet. That’s because there’s a good chance that modification or customization will void the warranty. Even if it didn’t, you’re still giving the car insurance company a good reason to deny paying for car accident damages.
This limitation doesn’t apply to most used cars since the warranty period has likely already passed. However, it’s worth noting that some used cars will still have an active warranty.
Also, note that not all customizations will void your warranty. It usually applies only to modifications that may affect the car’s performance. These may include shifting to oversized tires and changes in the car parts like the engine, suspension, and chassis. Customizations that affect only the vehicle’s aesthetics aren’t likely to void the warranty.
3. Used Cars Are More Affordable
It’s common knowledge that between the two, used cars are the more affordable option, and for several reasons. One, and perhaps the most evident reason, is that used cars are likely to have been damaged in the past. The damage will naturally cause its cost to depreciate. Two, used cars are usually older models, and older car models are typically cheaper than new ones.
Of course, there are exceptions to this rule, specifically with vintage cars, since they’re valued not by their performance but by their rarity. Hence, they’re not practical if you want functional automobiles.
For your reference, used cars are valued at 30% to 90% of the price of their new counterparts.
That means you can put the money you saved by choosing a used car into other investments. This affordability is one of the reasons why used cars are more commonly bought.
4. You Can Find Used Cars In Tip-Top Shape
Though used cars are generally worse than their new counterparts in terms of performance and remaining durability, the difference isn’t always too significant. There’s always a possibility of finding a used car that’s only slightly worse yet has a considerably lower price. Those are what you’d call excellent deals, and interestingly, experts say they’re easier to find today.
One of the reasons is that many car owners weren’t able to use their cars much during the pandemic. As a result, their vehicles are still in tip-top shape with little to no signs of damage.
Moreover, a lot of people have been struggling to secure funds recently. It just so happens that selling one’s car is one of the easiest ways to earn money quickly, especially if there’s an urgent need for it. For these reasons, there’s no better time to find used cars than now. But of course, this requires you to spend a lot of time sifting through countless deals to find the best one.
Used Cars: The Cons
1. There May Be Hidden Damages
One of the main issues with buying used cars is that the original owner may sell them without mentioning their existing flaws. It’s also possible that they didn’t know of the existence of such defects. These may include issues like a damaged gearbox, faulty engines, dysfunctional lights, and a dead battery, among many things.
While you can check for these issues beforehand by testing the car, there’s also the possibility that the original owner patched them up temporarily.
Either way, compared to new cars, used cars are objectively worse in terms of reliability. But again, it ultimately depends on your judgment and how well you can inspect the vehicle.
2. The Loan Length Terms Are A Bit Limited
Much like any product, you can purchase a car in two ways: (1) you can pay the whole amount at once or (2) buy it through installments. The latter is what you’d call taking a car loan.
It’s when you receive a lump sum of money from the supplier, which you must then use to pay for a car of your choosing. You’d then have to pay a portion of the amount you borrowed every month with interest until you pay the whole amount off. To get a loan, decide on several things, such as the initial loan amount, monthly payment, interest rate, and length.
There’s usually not that much difference between used and new cars for the first three factors. It just depends on the car model, not its age. The difference lies in length.
In most car dealerships, used car loan lengths range from 12 to 48 months. But for new cars, you can take a loan that lasts from 12 to 60 months.
In short, used car loans are a bit more limited in length.
3. Interest Rates May Be Higher
In addition to the loan length, the interest rates of used cars are also slightly higher than that of new cars. There are several reasons for this. One, the manufacturer often incentives the purchase of new vehicles, which is why their interest rates are lower. Two, used car buyers typically have low credit scores, so car dealerships increase the interest rate to secure the deal.
New Cars: The Pros
1. You Can Choose Your Ideal Model Easily
Used cars are accessible, but one thing to keep in mind is that the supply of a used car model can run out quickly. Suppose you want Car Model A, and there are four of that items in a listing.
Once all four are bought, it’ll take some time before another one appears.
In the case of new cars, if you want to buy Car Model A, you don’t have to wait until someone sells that specific car. You can simply look for the brand and get one from there. In short, the supplies don’t run out unless the company that manufactures them stops production.
2. You Can Order A Custom Car
While you can’t customize a car after purchase without risking a warranty void, it doesn’t necessarily mean it’s impossible. If you have money to spare, you can order a custom car with additional features, accessories, and other elements that aren’t present in the original model.
With this option, you can get a custom car without voiding the warranty since you’re technically not the one customizing it. This option isn’t something that’s possible for used automobiles.
3. It’s Easier To Find A Good Car
Though there are used cars with only slightly worse performance than new ones, you will have to spend time and effort to find those specific ones. But if you buy a new car, you don’t have to spend that much time inspecting them since they’re all in their best shape. Of course, you still need to take your time looking for a good model, but it’s less time-consuming and stressful.
New Cars: The Cons
1. You Must Have A Good Credit To Get A Good Car Loan Deal
Used car loans are tailored in favor of those with a low credit score, while new car loans are for those with a high credit score. If you have a low credit score, you might have to spend a lot of time looking for a decent car loan deal with a reasonable loan amount, monthly payment, and interest rate.
2. The Insurance Rate Is Usually Higher
If you’re buying a new car in a country like the US, car insurance is mandatory. Therefore, it’s almost always an added cost. The insurance rate may vary from one company to another. But the rate for new cars is typically higher than for used cars. The difference can be significant depending on the company.
Which Should You Choose?
Based on their pros and cons, each of these two options is ideal for different scenarios. If you’re on a tight budget, opting for a used car would be the wiser option. However, you would have to spend your other resources, like time and effort. But if you have the money to spare, you can opt for a new car instead to save time and effort. Put simply, it’s not a decision someone else should make for you as you must decide for yourself.