New car smell can be added to a used car. Rebates and discounts can make a new car priced like used. There are many different opinions on the advantages and disadvantages of buying a new car. There are just as many opinions regarding used cars. The real question is, “Which car is best for you?”
Some very wealthy people have never bought a new car in their lives. With so many super-low mile used cars out there, what’s the point of paying thousands more for a few less miles?
Then there are those who refuse to buy used, regardless of their financial situation. They would rather buy a brand new beater than get into a high quality vehicle that has had someone else behind the wheel.
After all is said and done, it really comes down to personality and goals when deciding between new and used cars. The 20/20 rule applies – 20 percent of people will never buy new, while 20% of people will never buy used. For the other 60%, this article is for you.
Selection
Between huge dealer inventories, the option of dealers trading and bringing in a vehicle from another dealership, and custom ordering becoming more popular, the selection factor goes hands down to new cars.
For popular vehicles, it is definitely possible to find a used car. The internet makes it simple for someone to search around the corner or across the country for that perfect used car. Still, it’s nothing compared the options available with new.
Price Matters
Even in today’s ultra-competitive new vehicle market where MSRP has been replaced by Invoice as the starting mark for price negotiations, a car still loses 10%-20% or more of its value the moment it hits the street.
Low mile used cars a year or two old can be dramatically less expensive than its brand new counterpart. There are exceptions – Honda, for example, tends to lose less off the top because they rarely have rebates and their reputation is very strong.
Other than the few exceptions, a used car is normally dramatically cheaper than a new one.
Interest Rate
For the 95% of us who borrow money and make car payments, interest rate becomes an issue. New cars are less of a risk for the lender, so their bank rates are lower than on a used car. The manufacturer loan divisions make it even more appealing to buy new with 0% financing available on most vehicles at some point after their release.
Two or three points against a $30,000 loan can mean big money on a 4-6 year note. For shorter loans, the rate is less important.
Loan Term
While the rate is normally lower for new cars, the term is usually longer. A prudent buyer can get the same payments on a used car that they can get on a new car, only for fewer payments.
There is also the option of extending the term on a used car purchase to the length of a new car. Vehicles last longer. There are loan companies that will extend a note to 6 or more years on a 3 year old vehicle because they expect it to still be running after that amount of time. In those cases, the payments can be much cheaper than on a new car.
Peace of Mind
Going back to the new car smell, the new car knowledge is very appealing. A rough driver who doesn’t do car maintenance and likes to drive 90 mph in their Kia Rio can really hurt a vehicle, even with low miles. When you buy a used car, you take the risk of getting that car and not knowing the bad things it went through for months until it starts having problems prematurely.
Equity
Vehicles are not like homes. They depreciate, regardless of what happens to the market. Some depreciate less than others, but no matter what, every day makes it worth less than the day before.
Used cars have already absorbed the initial depreciation and are closer to leveling out on the depreciation scale. The first 2-4 years of a vehicle’s life result in a loss of up to 75% of its original value. In the first couple of years of a standard 5 year note, it is nearly impossible to trade in a vehicle that was bought new with no money down and not have negative equity.
With used cars, it is still difficult, but not nearly as hard as it is with new cars.
Final Thoughts
How often you trade, how well you negotiate, and the make and model of the vehicle you buy will determine a lot regarding the pros and cons of a new or used vehicle. Prudent buyers will seek out dealerships such as New and Used Cars in Oklahoma City to help determine which is best.
If there is no local dealership that is trustworthy enough, do the research online. Check out Kelley Blue Book for new car values and Los Angeles Used Cars | Memphis Used Cars to compare used car prices.
Information is the key to making a good decision, whether you buy new cars or used cars.
Car Buying Tips: Buying from an Individual or a Dealership
There is a ton of information out there about scams and deceit that happens when buying a used car from a dealership. There are definite pitfalls to buying from an individual as well. When it comes down to it, the real question is, "How hard are you willing to work for a good deal?"
Automotive SEO: Different from the Rest
Most search engine optimization products and offerings work the same. They will take any customer, perform typical SEO tasks that they do for other websites, and at the end of the day, they’re scratching their heads wondering why they can’t seem to breach the top rankings. Automotive SEO is an entirely different beast than any other type of optimization.
Car Buying Tips: Secure Financing Before Going to the Dealership
It’s a buyer’s market. The internet has made it possible for consumers to know everything they need to know about a car from reviews to used car history before the customer every goes to see the dealer. Still, the one step that many consumers forget to do is to get their financing secured before making the trip.
