Car Buying Tips – New Cars, Used Cars – Pros and Cons

Some very rich people have never bought a new car in their lives. With so many used cars with very low miles on them, 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 new mixer than jump into a high-quality vehicle that has had someone else behind the wheel.

After all is said and done, it really is all about personality and goals when deciding between new and used cars. The 20/20 rule applies: 20% of people will never buy new products, while 20% will never buy used products. For the other 60%, this article is for you.

Selection

Between huge dealer inventories, the option for dealers to trade in and bring in a vehicle from another dealer, and increasingly popular custom orders, the selection factor comes down to new cars.

For popular vehicles, it is definitely possible to find a used car. The Internet makes it easy for someone to search around the corner or across the country for the perfect used car. Still, it’s nothing compared to the options available with the new one.

price matters

Even in today’s ultra-competitive new car market, where MSRP has been replaced by Invoice as the starting point for price negotiations, a car still loses 10-20% or more of its value in the when he goes out on the street.

Low mileage used cars that are one or two years old can be dramatically less expensive than their new counterpart. There are exceptions: Honda, for example, tends to lose less because they rarely have discounts and their reputation is very strong.

Apart from the few exceptions, a used car is usually much cheaper than a new one.

Interest rate

For the 95% of us who borrow money and make car payments, the interest rate becomes an issue. New cars are less risky for the lender, so your bank rates are lower than a used car. Manufacturer loan divisions make it even more attractive to buy new with 0% financing available on most vehicles at some point after launch.

Two or three points against a $30,000 loan can mean a lot of money on a 4- to 6-year note. For shorter loans, the rate is less important.

loan term

While the rate is typically lower for new cars, the term is typically longer. A prudent buyer can get the same payments for a used car as a new car, just for fewer payments.

There is also the option to extend the term of a used car purchase to the duration of a new car. Vehicles last longer. There are loan companies that will extend a note to 6 years or more on a 3 year old vehicle because they expect it to keep running after that amount of time. In those cases, the payments can be much cheaper than on a new car.

peace of mind

Returning to the smell of the new car, the knowledge of the new car is very attractive. A rough driver who doesn’t do car maintenance and likes to drive 90 mph in his Kia Rio can really damage a vehicle, even with low miles on it. When he buys a used car, he risks getting that car and not knowing the bad things he went through for months until he starts having problems prematurely.

Equity

Vehicles are not like houses. They depreciate, regardless of what happens in the market. Some depreciate less than others, but no matter what, each day is 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 to 4 years of a vehicle’s life result in a loss of up to 75% of its original value. In the first two years of a standard 5-year note, it is nearly impossible to trade in a vehicle that was purchased new with no down payment and negative equity.

With used cars, it’s still hard, but not nearly as hard as it is with new cars.

final thoughts

How often you trade in, how well you trade, and the make and model of vehicle you buy will determine a lot regarding the pros and cons of a new or used vehicle. Prudent shoppers will look to dealerships like Used Cars Oklahoma City to help determine the best one.

If there isn’t a local dealer that is reliable enough, do your research online. Check out Kelley Blue Book for new car values ​​and

San Diego Used Cars – San Francisco Used Cars to compare used car prices.

Information is the key to making a good decision, whether you are buying new or used cars.