CarShield helps consumers decide whether to purchase a new car or buy used.
Buying a car is one of the most exciting things that a driver can do.
If you find yourself in the market to purchase a vehicle, no doubt, you’re probably feeling some of that excitement.
You should be!
Especially with how far technology has come to help in the process of car buying. You don’t even have to get off the couch. From start to finish you might only miss half an episode of the latest binge-worthy series on your preferred streaming service.
But even with all this convenience, there is still one major question that a buyer has to grapple with: Should I buy a new car or a used car?
It can be difficult to determine whether buying a new car or a used one is the best option for you. Almost as difficult as deciding what to watch next on Netflix.
Fortunately, CarShield is here to help navigate the difficult decision with the best options for you.
The allure to buy a new car can be very difficult to resist, mainly because they are just that, new!
They smell great (new car smell is so intoxicating) and don’t come with any problems or questions about the driving habits of the previous owners.
They also come with a lot of other attractive incentives, such as:
Every year models come out with brand-new technological features that you simply can’t do without, or a massive improvement on existing systems.
With the lane departure assist, self-parallel parking, rear cross-motion detection, blind-spot detection, and automatic braking, it’s like they drive themselves!
For a good look at these high-tech components check out our article on them here.
And that doesn’t even begin to include all of the luxury comforts included in higher-end cars such as heated seats and large touch screen infotainment centers with Apple CarPlay integration.
New Car Prices
With all of the desirable new technology that is being added to new cars, there is also a price increase that is involved.
In 2020 CNET reports that the average price of a new car lurched over the $40,000 price tag range. Ouch.
A price tag that hefty isn’t always within the budget of many new car shoppers and causes them to look for lower trim levels than they may have hoped for. Meaning they don’t get to enjoy some of the new technology advances they may have been sold on.
New Car Loan Rates
Not to let the sticker shock dissuade potential customers from purchasing a new car, major auto manufacturers offer 0% APR financing deals, plus bonus cash credit up to $5,000.
With rates that low and term lengths that can go up to 84 months (that’s 7 whole years), it becomes VERY easy to rationalize purchasing a car that you would normally consider way outside your price range.
These types of promotions are rather common at the moment, and it’s easy to see yourself behind the wheel of that one car you’ve fantasized about since high school or the last commercial you saw.
One of the best and most attractive benefits of any new car is the Auto Manufacturer’s Warranty. This protects the car against any mechanical breakdown repair costs that may occur within the specified term. For most manufacturers, this is the first 3 years or 36,000 miles on the vehicle, though some can go up to much longer periods and higher mileage.
Depreciation is an unavoidable and unfortunate reality in any car-buying scenario. It makes sense that it is a fear that most car buyers combat when they walk onto the new car lot.
We’ve all heard our parents or someone else warns us, “You lose thousands in value just by driving it off the lot!”
Well as it turns out, those prophets of value depletion were right. For the most part, anyway.
According to Edmunds.com, a new car loses an average of 11% of its value the very moment you drive away from the dealership.
If that’s the case and you spend $40,000 on a new car, on the very same day its resale price plummets to $35,600. That can be a hefty hit to your purchasing confidence.
But no matter what car you buy, depreciation will be a factor. The only difference is how fast the car will depreciate.
While buying a used car isn’t as exciting as being the first owner of a vehicle, many benefits can be enjoyed.
The biggest factor that draws a buyer to the used car option is undoubtedly the price. Obviously, a used car will be cheaper than a brand new one.
Those savings could be used to find a car that has the higher trim amenities and technological upgrades that a buyer previously wouldn’t have been able to afford on a new car. This is a good example of the saying “less is more.”
Another benefit is the more consistent value. Remember the high depreciation rate on new cars? If you purchase a used car, you dodge that first steep hit in value. Especially if you buy a car that is only 1-2 years old.
A concern for any car buyer is whether or not the car they purchase will be dependable.
Understandably, consumers may not be as trusting of a used car. You can never be certain that the previous owner didn’t drive everywhere as though they were trying to win the Daytona 500. Or worse yet, treat the car like a rental.
Fortunately, there are entire services, such as Carfax, to check if a vehicle has been in any accidents or more. Many used car dealers include these reports at the time of sale to ease a customer’s mind.
Car manufacturers are also aware of the dependability concern and have Certified Pre-Owned programs set up. Used vehicles must pass a multi-point inspection to earn the Certified Pre-Owned badge of approval.
Before beginning the used car buying process, it is also helpful for consumers to select a brand that has good overall dependability ratings. Brands are rated each year by JD Power and Associates and you can see which auto manufacturers win the dependability award by vehicle type.
A drawback to buying a used vehicle is that it may not have the protection of the manufacturer’s warranty.
Unless, the vehicle is still relatively new and hasn’t aged out, or driven past the mileage allotment, of the original warranty.
Many used cars are sold that are still covered by the manufacturer’s warranty, but for cars that no longer meet those requirements, there are other options.
There is always the option to purchase an extended warranty, or a vehicle service contract, that will give consumers protection against mechanical breakdown.
For a great look at some of those options, check out our homepage.
Which is best for you?
There is no inherent right or wrong answer.
Ultimately, you have to make the decision, but armed with the right information that we’ve discussed above you will be much more informed when making that decision.
This will leave you with time to think about all the other important options to consider when buying a car, such as what color you should get.