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New Versus Used Car Purchase: Pros and Cons

Written By Sabah Karimi

Maybe the advert for the latest sportster caught your eye, and now you're off on a test drive. The attraction of a new car continues to be a strong motivating factor for buying a brand new automobile, but many car buyers skip the padded prices at the dealership and turn to the used car lot instead.

If you're in the market for a car, considering the benefits and drawbacks of each type of purchase can help you make the best car buying decision:

Benefits of Buying a New Car

New cars do offer several benefits, but are generally considered a 'luxury' purchase. If you have the money to purchase a brand new car, you can look forward to:

-Custom features and color choices - you'll get to pick and choose the latest features, gadgets, colors and design for your car
-Manufacturer's warranty - from Renault to Vauxhall, your purchase will be backed by a full warranty and an extended coverage is also available
-First time owner benefits - you will be the first ever owner of your new car and can look forward to a mechanically sound vehicle that's straight from the factory
-Upgrade options - if you want to trade in your car for the newest model next year, it will be fairly easy to upgrade the car whenever you want to

Drawbacks of Buying a New Car

New cars can be an attractive addition to your household, but also have several drawbacks such as:

-Immediate depreciation - the moment those tyres hit the pavement, you're knocking off hundreds of pounds off the sticker price
-Higher insurance - insurance companies put a premium on new cars, and even though what you end up paying will depend on the make and model of the car, it will still be much higher than buying a used version
-Higher risk of theft - new cars are prime targets for thieves and criminals, so be prepared to lock up your car and steer it clear of dangerous areas in the neighborhood
-More expensive overall - even when you've set up a payment plan with the dealership, the bottom line price will be considerably more expensive than a used car

Benefits of Buying a Used Car

Used cars offer several benefits and are especially valuable for those on a budget. A few reasons to buy used include:

-Lower depreciation rates - the car will not depreciate as quickly as a new car
-Stronger chances of negotiation - if you are working with a private seller, you may be able to haggle down the price
-Less expensive overall - a used car is priced significantly lower than something straight from the dealership and will help you stay within your budget

Drawbacks of Buying a Used Car

-No guarantees - in most cases, you are buying an 'as is' vehicle that could break down the moment you sign those papers of ownership
-No choices in features or color options - you're buying a car that's already been built and it might have few options for upgrades
-Maintenance and repair issues - you could end up spending hundreds of pounds fixing the car throughout its lifetime, spending much more than the car is worth
-Challenging to find a trustworthy seller - if you're lucky to find a trustworthy seller or dealer for your used car, you might be able to save some money; otherwise, you could be left with problem car on your hands

Bottom line: Many car buyers consider why they should pay a premium for a vehicle that depreciates the moment you drive off the lot. Used cars can be easier on the pocket book and can even have more value in the long-run. Still, used cars do come with a risk factor; if you're turning to a used car purchase either online or in person, its still important to remember there is no guarantee and it's usually an 'as is' purchase. A new car does give you the satisfaction of being the first owner of a fresh make and model and might be a better investment if you plan to keep it for a few years.

Learning as much as possible about your prospective car will help you make the best decision - accurate information from the dealership or the independent seller is vital, and you should take as much time as you need to determine if the car is the best match for you.

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