PROS AND CONS OF BUYING A USED CAR

Posted by Malini Somra on October 2nd, 2019

More car buyers prefer to buy used-cars over new cars, but is the right way to go? The major reason for this is because of the cheap prices of used car as compared to prices of new cars. However, there are more to be put into consideration than just the price when you are thinking of whether to buy a used or new car.

We will take a look at the pros and cons of buying both new and used cars.

Pros of Buying Used Cars

•              Lower Prices: New cars depreciate by 20% in their first year and about 40% in three years. This is one thing that counts against going for a new car. The low prices for used cars make it easier to get financing for buying one and you can even pay cash or make a significant down payment that will enable you go for a high specification car.
•              Cheaper Insurance: The amount you pay to insure a used car is cheaper compared to what you will pay for a new car.
•              Smaller Loan Amount: If you go for a used car, you will need to borrow less amount to buy the car. As a result of this, you incur minimal debt and you can even get this at a lower interest rate.
•              Easy to Pay Off: You can easily pay off the loan on a used car compared to new cars. With the fast depreciation rate of a new car, you might need to be paying for extra on repairs and maintenance. You might not experience this with a used car.
•              High Quality Options: You can get high quality used cars at amazing prices especially if you make a sizeable down payment.

Cons of Buying Used Cars

•              Mostly no Warranty: Most used cars when bought from a private party do not come with a warranty except if it is still under the manufacturer’s warranting when you bought the car. This means you will be missing out on protection against electrical and mechanical faults. However, some dealerships might offer their own warranties on used cars.
•              Reliability: As far as reliability is concerned, new cars take the lead here. Used cars are not as reliable as new cars because there are details about the car that you might not get in the vehicle history. The vehicle history report can only tell you about the vehicle’s title status, accidents in the past, service history and additional information that the seller may wish to share with you. Hence, it is important that you should request for a pre-purchase inspection and also test drive the car before you pay or sign the dotted lines.
•              High Interest Rates: Used-cars come with high APR and interest rates if you are not purchasing the car out rightly.  
•              Fewer Choice: If you are looking for a particular car with certain colors and features, then you might have little options to choose from based on the used cars that will be of that model and have the features that you want.

Knowing the pros and cons will help you to weigh the options available to you and you will be able to make a sound decision based on your budget.

Auto loan pros and cons, read more here - http://car-loans-finance.angelfire.com/auto-loan-pros-cons.html