Are you about to buy a car, but do not know whether to choose a used car or a new car or get a car on lease instead? Although either of the above options represents a solution for your mobility needs, you need to analyze which one suits you best. Buying a vehicle, whatever it may be, is an important decision and a very valuable investment that will surely bring good experiences. However, to make this decision it is essential to know the pros and cons of each of the options.
In this case, choosing between a new or used car or leased car can make a big difference if you do not consider some important factors, and that is one of the main mistakes of drivers with little (or no) experience behind the wheel. We know that each situation is different, so the first thing you should keep in mind is that the best decision will be the one that meets all your needs; regardless of whether in the end it is a used car or a new one or a leased one.
In the following article, we present the benefits of buying a used car or a new car or a leased car, to help you get the car of your dreams.
What are the benefits of a new car?
1. Take advantage of financing offers
The convenience of financing offered by dealers, at a low interest rate, is another of the basic benefits. Dealers may offer new car buyers’ special financial incentives, such as cashback or 0% financing during a promotional period. These deals could help lower the initial cost, making the car more affordable.
If you're thinking of buying a used car, you might also be able to take advantage of offers and incentives. For example, some manufacturers offer specials on Certified Pre-Owned vehicles if you finance through the dealer. But if you have low credit scores, you may not be able to qualify for special offers on new or certified pre-owned cars.
You can use a car payment calculator to help you. This tool allows you to enter different interest rates, loan terms, down payments, and more until you find the combination that gives you your ideal monthly payment.
2. Customize your car and get the latest technology
A great advantage of buying a new car is customization. If you want a specific color, interior or features, you can customize a vehicle to your liking and order it through a dealer. Buying a new car may also be the only way to get the latest technology. Think of lane change assist, adaptive cruise control, or even built-in software that can alert you when someone (like your teenager) is speeding or driving without a seat belt.
As well as the advanced technology and functionalities that having a latest model car gives you. A used car will not have the latest technology in terms of safety and fuel economy. New cars are increasingly developed in terms of fuel economy, safety, entertainment and even polluting emissions.
3. Freedom
New cars come with upgraded features. One of them is freedom: the maximum distance they can travel before having to fill the gas tank or, in the case of electric traction, the maximum driving time, before having to recharge the battery.
Fuel efficiency and savings is one of the most important benefits of buying a new car. Due to the help that this means for your pocket and for the environment. A gas budget calculator can help you to estimate your annual gasoline cost given the type of car you drive, the number of miles you drive per month, and the price you are paying for a gallon of gasoline.
4. Brand new
One of the most attractive advantages of buying a new car is that it is simply new! But, beyond this, there is the fact that you can be sure that your car has never had any accidents or mechanical problems.
The smell of a new car symbolizes that you are its first owner. No one else has ever been behind that steering wheel, so you can be sure it hasn't had any bumps or dents.
5. Better performance
Being a new car, it will be more effective. Performance is determined by the balance between the amount of useful work the car does while consuming as little energy as possible. Among the most outstanding and practical performances are thermodynamic, mechanical, and volumetric. In addition, a car fresh from the dealer will need very few repairs in its first few years of use, so you can focus only on its maintenance.
6. Get extensive warranty coverage
There is nothing like the satisfaction that comes from driving a zero-kilometer car, with that indescribable smell of new. However, the main advantage of buying a new car is that it comes with a warranty.
New vehicles typically come with a bumper-to-bumper and powertrain warranty, plus roadside assistance. These warranties can help assure buyers that qualified repairs may be covered.
If you're thinking of buying a used car, the warranty isn't necessarily out of the question. Cars with a few years and few miles may come with some type of manufacturer's warranty if it can be transferred to the new owner. Certified used cars purchased through a new car dealer may also come with an extended factory warranty.
What are the benefits of a used car?
The biggest advantage of buying a used car is that you can eventually sell it for about the same amount you paid for it for years to come. On the other hand, when you buy a used car, it's easier to save up and pay for it. But, for this to be a good investment, it is important that you review it in detail and that you evaluate its indicators (mileage, crashes, repairs).
1. Price
Used cars are more affordable than new cars. So, if you want to save some money, look up your preferred car model from previous years.
Remember that cars are depreciated from the moment they leave the dealership. However, a used car can give you years of dependability at an affordable cost and be a great alternative to upgrading your current one. A used car can fit the buyer's budget much better. Likewise, you can find cars in very good condition and excellent conditions. In addition, time and money are saved in the initial procedures, such as vehicle registration, license plate assignment, among others; The previous owner took care of that.
2. Test Drive
A car must be tested and inspected before purchase. This is doubly important for a used car. Dealerships give you the freedom to do it; helping you verify their performance, their documentation and history. Checking the exterior and interior of the car, the engine, the steering, the clutch, the brakes, and the suspension is key when buying a used car.
If you discover a problem, you have two options: use it in favor to reduce the sale price and then repair it yourself, or simply choose to buy another.
The most important thing is that when you buy a car at a dealer you have the opportunity to test it and carry out the corresponding tests and analyses; to make sure all parts of the car work normally.
3. Devaluation is slower
A new car depreciates (or loses its value) as soon as it leaves the dealership. In fact, it could lose 20% or more of its value in the first year, depending on the make and model. This may not matter to you if you plan to own the car for a long time, but if you finance your car and plan to sell it within the next two years, you may not be able to sell it for enough to cover what you owe on the car loan.
In general, used vehicles do not depreciate as quickly as new ones. After the first year, the devaluation of used cars can decrease until reaching between 9% and 12% per year in some models.
What are the benefits of leasing a car?
You need a new car, but which is more financially convenient, buying or leasing? Many enter the purchase thinking that if they don't have the finances, a car lease might be better. Also, leasing can be a good option for those looking to drive newest cars but don't want to own them. However, applying for an auto loan to buy a new or used car can help you save a lot of money in the long run compared to renting a car.
Another thing to keep in mind is that if you buy a car, once you make the final payment on the loan, you will fully own the vehicle, while at the end of the lease, you will have to return the car. To help you determine whether to buy or lease your next car, use this handy car buying or leasing calculator to help you decide if it's better to lease or buy a car.
This calculator will give you a side-by-side comparison of what the net costs of buying or leasing a car will be based on the information you input. To get the most accurate estimate, you'll need to know the term of the loan/lease term in months, purchase price, initial payment, interest rate, sales tax rate, annual depreciation etc.
1. Monthly expenses
If your priority is to have low monthly payments, a lease is right for you. In general, lease payments are lower compared to financing the purchase of the vehicle. But keep in mind that monthly payments will not make you the owner of the vehicle. Therefore, when the lease ends, you may have to renew it. That implies 2 to 5 more years of payments and, in the end, it becomes a vicious circle. Instead, buying a car means that once you pay off the loan, it's yours entirely.
2. General expenses
One of the advantages of leasing a car is not having to worry about repairs. Most leased vehicles are guaranteed for the duration of the lease, so if you have factory issues, your dealer can fix it for free. But you will still be responsible for any cosmetic repairs. Remember: if you lease it, it is not yours. They're just lending it to you.
So if you scratch or damage the door, you will have to pay to repair it. If you buy the vehicle and plan to keep it, you need to budget for regular maintenance. Over time, cars need maintenance and repairs. But the good news is that once you pay off the car loan, you can use the money you used to make monthly payments to cover maintenance costs.
Conclusion
There are pros and cons to buying new and used cars, and what you decide may depend on your personal preferences and your financial situation. Just be sure to compare your options, negotiate the sale price, and shop around for loan options if you're not going to pay cash. Getting loan pre-approvals from a few lenders can also help you get multiple estimates and compare your options.
Buying a new or used car is a matter of personal preference, desires, and financial capabilities. There is no right or wrong answer to your search for the ideal car. Finally, if you have already decided on a car, remember that it is essential to check, in addition to the condition of the vehicle, its history and official records to detect any type of pending fines or restrictions that it has to make the transfer.
