Used cars or new cars?
10 June 2023
By Joy Pearson
When it comes to purchasing a car, there are a lot of decisions to make, and one of the biggest is whether to buy a new or used vehicle. While new cars may seem like the more attractive option, there are a lot of benefits to buying a used car, especially when it comes to finance. In today's post, we'll explore why used cars are often a better choice than brand new ones, when you're looking for car finance.
One of the biggest drawbacks of buying a new car is that it depreciates in values as soon as you drive it off the lot. In fact, new cars can lose up to 20% of their value in the first year alone. This means that if you finance a new car, you'll be making payments on a rapidly depreciating asset. On the other hand, used cars have already gone through their initial depreciation phrase, which means they hold their value better. This can be a huge advantage when you're financing a car, as you'll be able to get a better return on your investment if you decide to sell it in the future.
Insurance costs for new cars can be significantly higher for new cars than for used cars. This is because new cars are more expensive to repair or replace if they are damaged, or involved in an accident. Additionally, new cars are often financed with higher loan amounts. which means lenders require higher insurance costs because they are less expensive to repair or replace. Furthermore, if you purchases a used car outright or with a smaller loan, you may be able to get by with lower insurance coverage levels.
When you finance a new car, you'll likely be paying more each month than you would with a used car. This is because new cars are genuinely more expensive, and lenders often require higher monthly payments to ensure they are covered if you default on your loan. Used cars are quite the opposite. They are often less expensive than new cars, which means you'll be able to finance a lower amount. This can lead to more affordable monthly payments that fit better within your budget.
When you're in the market for a new car, your options are limited to the current year's models. This can be frustrating if you have a specific make or model in mind, or if you're looking for a specific feature that isn't available in the newest models. With used cars, you have a much wider selection to choose from. You can choose from older models, different makes and models, and even luxury vehicles that may have been way out of your price range if you were buying new.
Whilst new cars may seem like the more glamorous choice, there are a lot of benefits to buying a used car, especially when it comes to financing. From lower depreciation rates to more affordable monthly payments, a used car can be a smarter investment that a new one. So of you're in the market for a car and are considering financing, be sure to give used cars a second look.