If you’re contemplating purchasing a vehicle you might be deliberating between a new and used car, both of which have their pros and cons.
New cars will come with a warranty, modern features included as standard and easier loan options. However, used cars have no delays and can prove to be reliable.
What are the benefits of purchasing a new car?
Choice
You’ll be able to choose your preferred car brand, model, and colour and customise by adding extras as required.
Stock
If the model you want isn’t in stock, you’ll be able to place an order or add your name to a waitlist to secure one when they’re back in stock.
Warranty
A new car should be free from mechanical issues or defects as it wouldn’t have been exposed to wear and tear. If there are any issues all new cars will have a warranty which will cover any issues you may encounter with your new car.
Loan rates
Interest rates on loans for new cars are usually lower than that of used cars. Lenders have higher confidence that a new car will keep its value longer than its used counterpart, which will help secure a loan in the event of a payment default. Additionally, newer cars are less likely to be written off in case of an accident.
What are the cons of purchasing a new car?
Price
New cars cost more than used cars and will depreciate rapidly in the first few years of ownership. While you can get a lower rate on a car loan, you will still be paying off a car with a higher price tag.
Delivery delays
In recent times delivery delays are not a surprise given the increase in demand for new cars. Depending on the type of car you want, wait times can range anywhere from months to over a year.
Loan limits
Secure car loans are available for particular makes and models of new cars so the lender can ensure that the vehicle will retain its value long enough to secure the loan. It may be harder to get a car loan approval if you’re buying a car that falls outside of a lender’s criteria.
What are the benefits of purchasing a used car?
Price
Used cars are generally cheaper due to their age, depreciation, and usage. The older the car is and the higher the odometer, the lower the price should be. Exceptions to this include prestige or classic cars.
No delays
If you find a car in the model and colour you prefer, in most instances you’d be able to drive it away without having to wait. If you aren’t able to purchase it right away, trawling the used car market will often end in finding a suitable alternative.
Quality
If a seller has maintained their car and kept all service records, a used car can be as reliable as a new car, especially for models that are popular and have access to servicing and spare parts.
What are the cons of purchasing a new car?
Options
If you’re looking for a specific car model, there may not be many options with the features you want. Often you may need to forego certain extras and features. If the car you want isn’t available for purchase, you may need to consider changing your search parameters.
Experience
It may not be easy to determine whether a car has had proper servicing, which means that you could encounter mechanical issues down the line. While newer cars may be covered under warranty, it’s more likely that repairs for used cars will come out of your own pocket.
Higher loan rates
Used cars may have higher interest rates compared to new cars as lenders might consider them to be riskier. The lower market value makes it trickier to secure a loan and they are more likely to break down or be written off due to age and usage.
It’s best to research the car make and model that you want and list down the non-negotiable features you need. From there, determine your budget, take the car for a test drive, get quotes for both new and used cars and ask about any delivery delays dealerships may be facing. This will help in determining whether you should get a new or used car.
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