Buying a used car can save money, but may seem as more of a risk than buying a new vehicle. Purchasing a car brand new brings the satisfaction of being the very first owner, but you're going to have to dig a little deeper in your pocket for the extra cash. So which should you do? There are pros and cons to buying both conditions, and only you can make the decision given your specific financial situation and motives.
This article will highlight some of the benefits and disadvantages of buying a new vs a pre-owned vehicle. You should always do your own research on any financial decision you make, because only you can determine what will best suit your needs. Here are a few things to consider when deciding between buying a pre-owned vs a new vehicle.
How Much Car Can You Afford?
The first step in buying a car is determining how much you can afford without breaking the bank. Edmunds.com suggests that a good rule of thumb is to set your budget at no more than 15% of your monthly take-home income on your next vehicle. Their website has a calculator at www.edmunds.com/calculators/affordability.html making it simple to determine how much you can afford.
If you think that 15% of your monthly income doesnâ€™t sound like much, this is only the amount you will be paying for the vehicle itself. Something that many car buyers forget is the extra expenses that come with purchasing a vehicle. You must consider costs like insurance, maintenance, and fuel before making any big decisions. These expenses will add a substantial amount to the monthly payment you think you will be paying.
According to autotrader.com the cheapest starting price of all brand new vehicles on the market is the 2021 Chevy Spark starting at around $14,000. For a 60 month loan at a 4% interest rate, it will cost you $258/month for the vehicle alone. If you are following the 15% budgeting rule, to afford this vehicle, your monthly income after taxes should be at least $1,720.
Advantages of Buying A Used Vehicle
There are several Advantages to buying a vehicle after it has been previously owned. Here are a few benefits you will get from purchasing a pre-owned vehicle.
Cheaper Price for Higher Value
Unlike a house or other appreciating assets, vehicles are an item that start decreasing in value as soon as they are purchased. This is bad news for someone who is buying a car brand new, but great news if you are looking to buy used. This means that you can find a pre-owned vehicle that is only a few years old that has dramatically decreased in price and there may be nothing wrong with it.
Just because a vehicle has been sold by the owner does not always mean that there is something wrong with it. The previous owner may have just gotten tired of the vehicle or ended up wanting something bigger and better for themselves. This will leave you a vehicle that is in great condition, is only a few years old, and has reduced in value by the thousands.
You Can See How The Vehicle Has Performed in the Past
Luckily, all vehicles have a carfax report attached to their vin making it easy to see every major service or accident the vehicle has been through. If you take a quick look at the vehicle's report, you will be able to see if there have been any issues with the vehicle in the past.
If there are previous issues with the vehicle that are questionable to you, simply move onto the next one. New vehicle owners are taking a gamble in a sense that the vehicle will perform as if it is brand new, but this doesnâ€™t always happen. There are manufacturer warranties available to protect new vehicles, but the warranties only last for so long.
Visit Driverâ€™s Way in Pelham, AL for a Quality Used Vehicle
If you are looking for a high quality pre-owned vehicle, visit Drivers Way of Pelham, AL. We only buy and sell the highest quality vehicles that go through a 240-point inspection process before we put a price tag on the vehicle.
We encourage a no-pressure sales approach here at Drivers Way, so you can take all the time you need and test drive as many vehicles as you want before committing to a purchase. Contact us today using the form below.