People consider many things when purchasing a car, but the first and most basic is whether to buy a new or used car. This article helps you decide which car to purchase as it outlines the benefits and disadvantages of buying a new vs. a used car.
What is the difference between buying a new vs. a used car? People take a huge loss when purchasing a brand-new vehicle. Learn more with House of Cars Arizona today!
Buying New vs Used Car. It’s a widely known fact that people take a huge loss when buying a brand-new vehicle, but do you know by how much?
Brand-new vehicles depreciate in value by as much as 11% as soon as they’re driven off the lot, and to a minimum of an additional 10% by the end of the first year. That means that you’ll lose $2200 on a $20,000 vehicle right after purchase… YIKES! By the fifth year, vehicles will depreciate (on average) by as much as 60% and sometimes even more. That’s a whopping $12,000 that you’ve now lost on your $20K vehicle! Yeah, we’ll let that sink in for a minute…
When it comes to depreciation value, some other factors to take into account are:
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Purchasing a used vehicle is an excellent way to own a car and spend less than buying a new one. Here are some of the main benefits of purchasing used vehicles:
A used car is cheaper than a new one, which means you can own a vehicle at an affordable price. A used car also has a relative value that allows a buyer to upgrade to a better model.
The age of a vehicle affects factors such as insurance rates and financing. However, buying a used car costs less, even with all taxes and charges. When considering purchasing a new or used car, research available car deals to find a suitable insurance rate package.
You suffer less depreciation cost when you buy a used car, which makes buying a used car more economical.
Nearly a quarter of the carbon dioxide emitted by a vehicle in its entire lifetime is produced in the manufacturing and initial shipping stage. As a result, a used car emits less carbon dioxide than a new car, thus having a lower environmental impact.
We all have different car preferences, but you cannot build a used vehicle to order. The car model, wheel design, or option plan you want may no longer be available, but there is always something good you can purchase.
In most cases, new cars have crazy deals, but most of the new car deals have many hidden fees included in the purchase price. Hidden charges include destination charges, shipping costs, and “dealer preparation.” For instance, a new car price may consist of a hidden advertising cost worth $1,000.
While hidden charges may also apply for used cars, the amount is not as exaggerated as in a new car purchase price. Additionally, the cost of registering a used car reduces each year.
Buying a certified used vehicle gives assurance that the car has been previously inspected and is reliable. In addition, a warranty is important when purchasing a new or used car, and certified pre-owned vehicles normally have extended warranties and other benefits. In addition, previous owners usually fix any major vehicle issues to increase the chances of passing a pre-purchase inspection to sell fast.
Depreciation is a factor to consider when deciding between a new and a used vehicle. For example, buying a new car means you incur more depreciation costs than when you buy a used car. The value of a car depreciates with each month and mile, but the greatest depreciation occurs immediately, meaning that there are car models that lose nearly half of their value in the first year.
A big percentage is lost in depreciation when you purchase a new car. For example, a new car worth $40,000 loses $8,000 value immediately after you begin using it as brand new.
With a used car, however, you do not have to worry about depreciation and challenges such as the rock chip in the paint because the previous owners will have handled that.
Example: If you buy a new car at $40,000 and sell it at $25,000, you would incur a depreciation cost of $15,000. If you bought this same car at $25,000, after it has been used for three years, you could sell it three years later a $20,000. This time with the used car, you would incur a depreciation cost of $5,000.
Buying a new car can be an exciting purchase. However, when considering whether to buy a new or used car, you must note that the new vehicle loses value faster than an old one.
Used cars offer you value and save you money. House of Cars Arizona has the best-used car deals in Phoenix. Contact us for a reliable vehicle that will provide you with numerous benefits. You will also get good financing packages and bonuses.
Image Credit to Dirk Ercken / Inspiration GP