New or Used Car: What Is the Right Decision for You?

David Sung | March 17, 2014

Buying a new or used car requires much consideration. There are pros and cons to both purchases, as well as consideration of what aspects of car ownership are most important to you. Use these tips to ensure that you don’t end up suffering from buyer’s remorse over a big purchase.

Buying a New Car

First, we’ll examine the new car option. One of the obvious advantages of purchasing a new car is selecting exactly what your heart desires - ranging from the color of the paint to those heated seats you’ve always wanted on frigid winter mornings. A new car will typically give you less maintenance hassle, other than the regular oil change and tune-up, which is sometimes included by your dealership. Any hiccups that do appear will be covered by the new car’s warranty coverage; however, the time frame of the coverage will vary. This coverage can be priceless, but make sure you know what’s included.

While having that new car smell is nice, don’t forget about the cons of purchasing a new vehicle. The depreciation will start as soon as you drive off the lot. The typical depreciation amount is between 20 to 30 percent when it leaves the lot and about 50 percent in the first three years. And of course, you’ll be still be making payments based on the car’s initial value.

Buying a Used Car

In the case of a used car, as long as the car is within a given time period, it may come with the original factory warranty that can be transferred to the new owner. Certified pre-owned cars can be purchased from an authorized dealer and can feel like a brand new car in many cases. Before you purchase a used car, be sure to check the Carfax report. This report will allow you to see any past damage, the number of past owners, and if the car has any other kind of catastrophic history. If you’re lucky enough to find a used car that was once a leased car, you have the reassurance that it undergoes regular check-ups and oil changes, plus the lease required that it be driven under a certain amount of miles per year.

If you’re buying a used car from an individual, it’s a good idea to have it checked out by your personal mechanic. A mechanic will look for any signs of both immediate and future repairs so that you can factor that into your decision. The downside to buying a used vehicle is that it may be difficult to find the car with certain features that you desire.

Get the Most Out of Your Trade-In

If you have a trade-in, it can be applied to the purchase price of your new (or used) car. Before you enter the dealership, you should value your car using Kelley Blue Book or Edmunds, print out those details and use it as leverage. If you know your car needs some work done, consider getting quotes and determine if you think it would be worth it to have them fixed before you trade it in. Generally, the dealership will be able to repair it for a fraction of the cost, but that will be reflected in their offer.

Always clean the inside of your car, which includes removing any personal items and polishing up the interior. If your car has any dings or scratches, consider having them touched up. Take your car to the same-make dealer to get appraised, as they’ll typically want to stock your car on their lot. Even if you don’t sell it to them, it will be useful in negotiations with other dealers. Lastly, walk in with a firm grasp as to what your car is worth and what you’re willing to take for it. Did you buy your car new or used? Leave a comment and tell us why, and how you feel about your purchase.

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