Purchasing a vehicle is a huge financial decision. While buying a car, you may have to decide amongst opting for a new or a second-hand car. Both new and used cars have their own advantages and disadvantages. New cars have latest technologies, safety features and may be customized. However, the cost associated with new cars is high, along with other charges like insurance and registration cost. Pre-owned vehicles, on the other hand, are pocket-friendly, but chances are that they might not be in the best shape.
Take the following four aspects into consideration while deciding on a new or used car.
1. Your budget
You may opt for either a brand new or a pre-owned car based on your budget. New cars are expensive as compared to a used vehicle. If your savings exceeds the cost of the car, you may opt for a car loan. Your savings may be utilized to make the down payment, while the rest may be borrowed from a financial institution. While seeking funds for your car purchase, whether new or used, you may compare car loans from various lenders and select the one offering the best terms.
2. Depreciation hit
An important question to ask yourself while opting for a new car is whether you are ready to take the depreciation hit? New cars depreciate quickly in the first few years. A wiser decision would be to opt for a pre-owned car instead. A used car depreciates at a lesser rate. You may borrow a used car loan to fund your pre-owned car purchase. Several banks and non-banking financial companies (NBFCs) offer a high principal loan amount along with competitive interest rates. Besides, the flexible repayment plans and lower fees and charges will be an added advantage. Used car loans, therefore, help you own your dream car without much financial difficulty.
Reliability is an important factor to consider while buying a car. New cars are more reliable as they have not been driven before. Hence, the chances of a breakdown are lesser as compared to new cars. Subsequently, the cost of maintenance on repairs and servicing reduces. Used cars, on the other hand, have a greater risk of being damaged. Though the car may have been repaired by the previous owner, chances are that it may need repairs again.
4. Latest technologies
New cars come equipped with the latest technologies, such as multimedia and navigation interfaces. Besides, they are also saddled with safety features such as airbags, Electronic Stability Control (ESC), backup cameras, and Anti-lock Braking System (ABS), besides others. Pre-owned cars may not have such latest features.
While taking a decision to buy a new or a used car, you may take the aforementioned factors into consideration. Weigh the pros and the cons, and opt for the one that has greater benefits.