What Car Should I Buy? New vs. Used Car Tips

You know it’s time to buy a car. That part is easy; but what’s tricky is answering this question: What car should I buy?

Buying a car is a big decision. You might be weighing buying a new vs. used car. It’s essential to understand the differences and the pros and cons of each before you head to a dealership (or private party) and start looking at cars. We’re here to help with this post comparing new and used car benefits and drawbacks.

Pros and Cons of Buying a New Car

Let’s start by reviewing the pros and cons of buying a new car, starting with the pros:

New cars come with a warranty that will cover repairs in the first few years of ownership.
You may be able to qualify for lower financing rates than financing a used car.
New cars tend to have better safety ratings and more up-to-date technology than used cars.

Of course, there are a few cons to consider as well:

You’ll pay more for a new car than you would for a used car.
The car’s value will depreciate as soon as you drive it off the lot.
A new model may have issues that will be resolved in later models.

You may be determined to buy a new car. If you are, it’s important to know the potential risks before you do.

Pros and Cons of Buying a Used Car

Now, let’s review benefits and risks of buying a used car, starting with the benefits:

Used cars are more affordable than new cars.
A used car won’t depreciate the same way a new car does – the previous owner will have taken the biggest depreciation hit.
Insurance for a used car may be substantially less expensive than for a new car.

Of course, there are some disadvantages associated with buying a used car, too:

Used cars often come with no warranty or maintenance, although you may be able to shop for a certified, pre-owned car that has some protection, or get an extended warranty or GAP coverage through your lender.
Used cars often require more maintenance than new cars.
You may not be able to find the exact color and model you want.

As long as you’re prepared to be flexible with your choices and you’re prepared to handle the repairs, a used car can be a good choice.

Tips for Buying a New Car

Buying a new car requires some negotiating skills and homework. Here are some tips to help you get through the process and get a good deal.

Get pre-approved for an auto loan through your bank or credit union. A pre-approval puts you in a position of strength when it comes to negotiations – and you’ll be able to avoid paying a high interest rate for a dealership loan.
Do some homework on the makes and models you like and know what you want. Any salesperson you encounter will know each car on the lot. You want to have as much information as possible going in.
Know what your opening bid should be (the manufacturer’s invoice price plus extras) and what your “walk away” price is. You should never go into a negotiation without knowing where you want it to end.
Know the trade-in value of your current vehicle if you want to make it part of the negotiation.

These tips will help you get a good deal and avoid overpaying for a new car.

Tips for Buying a Used Car

Buying a new car is not all that different from buying a used one, but there are some differences. Here are some tips to help you buy a used car:

Have a budget in mind whether you’re getting pre-approved for a loan or are paying out of your pocket – and stick to it.
Check the reliability and ownership costs of the models you’re considering to ensure you’re not getting a car you can’t afford to maintain.
Locate good used cars online and compare prices, colors and features.
Do a test drive of the car to make sure it’s in good condition.
Run a vehicle history report to see if the car has been well-maintained or been in any accidents.
Check the Kelley Blue Book value of the car and use it to help you negotiate.
Consider any necessary repairs before making an offer.

If the value of a car is only $10,000 and the dealer or owner is asking for $12,000, you should offer something that’s slightly below the value if there are obvious repairs that need to be done. That way, you’ll be able to afford the repairs. You should not pay more than the car’s value.

Is a new or used car right for you? We suggest reviewing the pros and cons we’ve listed here to decide. Then, keep our tips handy to help you negotiate a good price and get the car you want.

To learn more about Addition Financial’s auto loan options, please click here now.