Next to your home, the biggest purchase you’ll make is a car. Both are big decisions and just like a home, you may wonder which is the better deal: new or used. In addition to which one is the best value, you need to consider your personal lifestyle. What do you use your car for and how often?
New and used cars both have their advantages and disadvantages, and one of those things is which has the cheapest car insurance available. Here is a list of the pros and cons to consider when you’re deciding on buying a new or a used car:
New Car Advantages
You can have it customized. You can choose the colors, features of the exterior and interior.
It has no past. Buying a new car is buying a car that doesn’t have a history. It is direct from the factory, sans a few miles for test driving maybe. This means it has never been wrecked and there are no maintenance history issues. Even the cheapest car insurance quote will run a history on your vehicle when it’s used.
It will be under warranty. Every new car comes with a warranty package, and you may be able to get free maintenance, even if just oil changes, for a limited time. Warranty and oil changes can be money savers – so, don’t discard the value there.
New Car Disadvantages
They cost more. A new car is going to cost you more money upfront (and each monthly payment for 3, 5, 6 or years). While you can do some negotiating, they are still more expensive than a used car. That car payment is only part of your expense; you’ll need full coverage, thus shopping for the cheapest auto insurance you can find will be a priority for most people.
They depreciate faster. Where your home will increase in value, your new car won’t. Some hold their value longer than others, but overall, they all lose value as soon as you drive it off the lot.
Used Car Advantages
They cost less. Used cars allow you to have your dream car at a lower price. Even if it is only a year or two old, it won’t cost as much as when it was brand new.
More selection to choose from. When looking for used cars, you will have more options available. And you’ll be able to buy a brand that you may not be able to afford new. These are things that help you get cheap auto insurance quotes.
They hold their value longer. New cars depreciate quickly, but once they have gotten to a certain age, the depreciation slows down. Thus, you won’t find yourself “upside down” if you’re looking to get a new car financed.
Used Car Disadvantages
They require more maintenance. Because it is used, it may need maintenance more often, depending on the wear and tear of the previous owner. They rarely come with any warranty, so any expense of repairs will be on you.
Last owner unknown. When you buy a used car, the car’s history can tell you a lot. It can indicate possible repairs and what the cost of the cheapest auto insurance will be due to prior accidents, a manufacturer recall, and overall maintenance issues.