When to Buy a New Car Versus a Used Car?
Well, it’s that time of the year gain. The chill of autumn bristles at our doorsteps and the dog days of summer are a fond but distant memory. The shift of the seasons always inspires thoughts of change and renewal, especially when it comes to purchasing a new vehicle. Statistically speaking, you’ve likely held on to your current vehicle for a longer average time than anyone has at any previous time in the history of modern automotives. Typically, this is the time of year when the most attractive trade-in deals and discounts are being advertised by dealerships. Making the decision to jump ship to a new ride over your current one can be nerve-wracking, especially when considering the option of whether to buy a vehicle totally new or used. In preparation for this momentous occasion, National Transport has curated a list of handy tips to equip customers with the knowledge necessary in entering a dealership and driving out with a great deal.
What Are the Benefits of Purchasing a New Vehicle?
The pull to walk into a dealership and drive off the the lot in a top of the line automobile is infectious, and not simply for the appeal of an easy, immediate solution to one’s vehicle woes. Dealership are in the business of motivating and securing purchases, going so far even as to offer unlisted, negotiable price drops for customers savvy enough to wade through the confusing double-speak and legalese to strike at a prime discount. Not only is buying a new car an easier, more streamlined process than purchasing a used vehicle, automakers are more inclined to offer incentivized deals, such as price-reduced rebates, to encourage purchases. The right words at the right time can shave off as much as thousands of dollars off the initial sticker price if one knows when to walk onto the lot.
For instance, of all the days during the week to purchase a new vehicle, Mondays are far and away the best choice for purchasers. According to TrueCar.com, average Monday discounts reach as high as 8.1 percent off the initial selling price of vehicles as compared to the weekend days that precede it, with Sunday representing a peak of 7.49 percent off on Sundays and 7.49 percent off on Saturdays. The further towards the peak of the work week, the larger the discounts before receding into the weekend. May, October, November, and December are consistently the best times of the year to pull the switch on a new vehicle, tied to major promotional holidays such as Memorial Day and New Year’s Eve/Day.
There’s obvious benefits that come with that of a new vehicle purchase: Cutting edge technology designed with equal parts comfort and utility in mind and the peace of mind knowing that you’ve acquired a vehicle at the absolute peak of its maintenance. Not to mention the social incentive of being able to show off your brand new purchase to friends, colleagues, and loved ones alike. Innovations in advanced safety features and driver assistance technology keep you and your future passengers out of harm’s way, while increased fuel efficiency keeps you on the road for longer.
What Are the Disadvantages of Purchasing a New Vehicle?
There’s a lot to take into account for the purchase of a new vehicle. With as many benefits there are behind purchasing a new vehicle, there are also potential pitfalls behind said purchase. For instance, the cost-to-depreciation ratio for a new vehicle is higher than compared to that of a used vehicle. It’s no great secret that, the moment you drive a car off the lot, the value of that vehicle drops. While many quibble over the exact percentage, it’s commonly-accepted knowledge that new vehicle depreciate in value anywhere between 9-20% the moment they are driven off the lot.
By the end of the first year, mileage and subsequent wear and tear could bring that estimate up to 30 percent. The rate of depreciation, of a new vehicle is predictably higher than that of buying a used vehicle because the depreciation is respective to that of the vehicle’s purchase cost. For instance, if you were to purchase a brand new vehicle for $30,000, that vehicle will have cost you $15,000 in depreciation within three years of purchase. In comparison, if you were to buy the same car used at a price of $15,000, that vehicle’s depreciation would only have cost you $5,000. And the higher costs of purchasing new don’t necessarily stop at the price. Because its value is higher, you’ll also have to pay much more in sales tax. Your insurance rates will likely be higher too.
What Are the Benefits of Purchasing a Used Vehicle?
Let’s just start with the most basic benefit from which all other benefit spring out of purchasing a used vehicle: the price. Unless it’s some exotic collector’s vehicle, a used car should never cost as much a new one. Consequently, the rate of depreciation among used vehicles is lower compared to that of newer vehicles because of this, as previously stated. Lower insurance rates are another plus to buying a used car. If a vehicle is worth less, then naturally it costs less to insure it. Registry renewal rates are also cheaper. And on top of that, not only is the purchasing process of a used vehicle a less arduous experience compared to buying new, you have the benefit of saving money that could be put towards buying a newer car down the line while still having the utility and convenience of owning a vehicle.
There’s also the affordance of choice. While, of course, you can’t purchase a made-to-order used car, those don’t exist; there is a freedom in choosing from the entire catalog of modern automotives compared to the generous though ultimately limited offerings of contemporary auto manufacturers. New is nice, but there’s nothing like the charm and power of a vintage Charger’s engine roaring at the peak of performance. Also, let’s be honest: one of the prime advantages of purchasing a used vehicle as opposed to a newer model is less stress. If a used car gets a scuff on its bumper, it’s no big deal. It’s hard to say that for a newer car, the financial blow in repairing such damage combining with the emotional fallout of having damaged your prized ride.
What Are the Disadvantages of Purchasing a Used Vehicle?
Financing a used car will almost always require money down, whether in cash or a trade-in with equity, regardless of the condition of the vehicle. The most prevailing factor behind the decision to purchase a used vehicle is whether or not you have the money to afford the routine maintenance and repair of said vehicle. Certain auto dealerships offer incentive maintenance on new car purchases up. There’s also the elusive appeal of “value” inherent in a new vehicle that a used one, unless it’s a well-maintained vintage build, just can’t measure up to. Because of this the resale value, when timed correctly, can earn you more money than if you were to trade in an older model not only on the appeal of its more modern amenities, but its increased fuel economy.