New or Used Car?

by Alex Hess

in Personal

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A common dilemma for most people when buying a car is whether to buy a new or used one. Let’s see some points which can help you in making decision on this matter.

Let’s take a look at the new car first. As its term says, new car provides you with new set of system and history especially the one from newly-groomed models. It probably can offer you best fuel efficiency and good safety options as it is “new”. In the same time, many financial institutions can provide financing programs with low or no interest rate thus suggesting that buying a new car is financially more cost-effective than a second hand car.

However choosing to buy a new car can cost your wallet. It is not necessarily for news car to be more expensive than used cars, but you have to keep in mind that cars can depreciate in value. The fact is – A vehicle loses most of its price in the primary few years of ownership. As you are using the car, the car’s price is decreasing until the wholesale value.

Now let’s take a look at the used car.

Nowadays used car superstore chains and dealers are creating it easier than ever to shop for with huge inventories and easier shopping system. A good point to be considered is – if you decide for a 3-year-previous model, you can save about 30-40% over new one.

If you are still unsure while making the decision in buying any used car, double-check them.  Take your time to check the details of the car such as odometer and other issues. Arrange a test drive at night time and on rainy day where you can detect any serious damages on the important parts of the car.

Interest Rates

Auto loans for new cars usually have lower interest rates compared to used one which can have higher interest rates however it depends on the financial institutions that can cover the price of the car. When comparing your options, make sure to make decision based on your current budget and financial commitment. Auto loan can take 20% of your monthly income. Insurance rates will also depend on the age of the car however in this case the used car tends to be less costly compared to new one.

It is always a wise decision to analysis and organize your car finance before going to the dealership and buy the car of your choice.

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