Every situation is different, but the first question most people have after deciding to buy a car is whether to go new or used. There are great reasons for both, but the name of the game is usually getting the most out of your purchase, and weighing the cost/benefit analysis of future depreciation. While maintaining a used car may require more time and money (especially if purchased from a disreputable dealer), new cars come with a steep overhead and, if you can’t pay up-front, considerable interest. So which is the best for you? Every situation varies, but use these three questions to help you decide what might be the better option.
Can you truly afford the depreciation factor?
New cars are notorious for the rate at which they depreciate – by some estimates, up to 25-30% the second they roll off the lot as your own. By the end of 3 years since you bought it, your car can be worth as little as 50% of its original price! Some cars see this happen less, and some more, but overall, that is the average number – meaning you are very likely to see your car lose 6, 7, or $8,000 within just a few years of owning it.
If you can afford this and have always dreamed of owning your own brand-new car, it is your decision as to whether or not the depreciation value is worth the tradeoff. Purchasing a used car effectively subtracts the depreciation from the original cost, meaning the previous owner – not you – will be the most affected by this consideration.
Is it within your budget to maintain and repair a used car?
On the plus side, regardless of theoretical value depreciation, new cars are often protected by a several-years-long factory warranty, and will sometimes be covered by the dealer as well. After that period, however, your car goes the way of any other – repairs and maintenance are covered by the owner. These warranties aren’t designed haphazardly, and many new cars will escape needing changes until they have expired anyway.
That said, a used car can be expected to need repairs and maintenance more often than a new one. Budgeting in advance to maintain and repair a car will be necessary in order to keep it in excellent working order and prevent further damage stemming from unaddressed issues. Some used cars will still be covered in part by their “new car” warranty, at least for several months or even a few years. If you can check with the manufacturer to make sure a warranty can be transferred, you stand a good chance of saving yourself money over time; certified pre-owned cars may also offer a factory-backed limited warranty.
Can you find a way to transport yourself in emergencies, while a used car is in the shop?
If you purchase a car from a reputable dealer, you will know exactly what is in store for you when it comes to the general condition of your car. That said, most honest car dealers will let you know that any car beyond a certain age or condition will need to be in the shop at least a few days per year, for routine care and maintenance, as well as any incidental problems you may have.
If you are absolutely unable to excuse yourself from obligations due to an issue stemming from car repair, or cannot find a ride to and from your home without purchasing your own means to do so, a newer-model used car or new car are better options for you than a car that may need a little more TLC.
As one of the premier used car dealers in Langhorne, PA, G&E Motors is here to help you figure out the difficult aspects of making decisions on care ownership and financing. Give us a call or stop by our dealership anytime during business hours to learn more about making the right car decisions to suit your individual needs.
