When it comes to buying a car, an individual has to take into account several factors. For example, he or she has to first ask themselves the following questions-
- Will I be able to afford the monthly EMIs, Fuel Costs, and Insurance rates?
- How much am I running the car daily and what benefit is it providing me with?
- Is it a good financial decision to buy a car given that it only depreciates in value?
A car rarely appreciates in value, unless you are buying an absolute classic of the yesteryears or a multi-million-dollar limited edition piece. Nearly 99.9% of all cars purchased lose their value the moment they leave the dealership.
In this article, we look at what makes a better financial investment- a used car or a new car?
Buying a Used Car: What you need to know
Most financial experts think that buying a used car makes a lot of financial sense. They say that while the used car will also depreciate in value, the same is not comparable to a new car.
In other words, whether you look at it in terms of cost-effectiveness or lower insurance payments, a used car is a much better option than a new one.
To help people understand this better, we have put together some points-
- When it comes to buying a used car, you do not have to pay any extra charges in terms of taxes, licenses, and permits. This is something that you have to do when buying a new car.
- The first-time expenditure of buying a new car would be something that most of us would not be able to afford. In addition to the bigger down payment, you are also looking at extended periods of EMIs.
- Old cars are far easier and convenient to insure. The charges are nearly half as compared to a new car. If you wish to know more about car insurance, click here.
Buying a New Car: Who this is for?
Many people that are aggressive proponents of buying new cars point out that buying a new car helps them in terms of lower maintenance costs.
Additionally, they also say that if you want an automobile to have the latest safety features you need to go for the latest and newest models. A new car also makes sense if you are looking to consider the fuel consumption and average.
In other words, a new car is likely to be far more fuel-efficient than a used car. This holds value for individuals that run an average of fifty to a hundred miles a day. However, if you have lower per day running, then you will not be able to effectively benefit from fuel efficiency.
At the end of the day, a new car is going to depreciate drastically in value. However, buying a new car is more than just a financial decision. It is also a highly aspirational sense of emotion that comes with a certain sense of achievement in life.
The Bottom Line
Depending on who you ask, you are likely to hear divided opinions on the used versus new car debates. If you are someone who has just learned to start driving and is looking to purchase a car, an old car makes much more sense. You can ding it and not feel sorry to the extent that you would on the shiny gloss of a new car.
Even if you are going to get into serious accidents, getting an old car fixed is easier and cost-effective. A new car would go through so many hassles at the insurance, repair shop, and legal junctures.
If you wish to know more about used versus new car debates, write to us in the comments section below. We will be more than happy to answer as many of you as possible.