Buying a vehicle can be a big financial commitment and a long-term decision. After all, most people report keeping a vehicle for five to ten years before they envision themselves purchasing a vehicle again.
When it comes to purchasing a vehicle, there are two routes you can go – purchasing a new vehicle or purchasing a used vehicle. Buying new or buying used each has its own set of benefits.
Benefits of Buying a New Vehicle
When you think of buying a vehicle, you may naturally be drawn to explore options for buying a brand new vehicle. There are several advantages to doing so.
New vehicles could include the newest technology, from blind spot sensors to lane assist. And whether it’s due to new technology or simply due to the gas-guzzling nature of many older cars, new vehicles typically get better gas mileage. New vehicles can also have a longer lifespan. It’s estimated that new gas vehicles today can last for up to 200,000 miles and new electric vehicles can last up to 300,000 miles before needing to be replaced.
Another benefit of buying new is that the vehicle can come with its full warranty coverage. It’s no secret that things could break or malfunction in a vehicle; having the full warranty means that when something goes wrong, and it’s the vehicle manufacturer’s fault, the vehicle manufacturer should pay to fix it with no cost to you. Used vehicles may only come with a limited warranty; frequently, they won’t have one at all.
Finally, since car dealerships typically make the most money off of selling their new vehicle inventory, they will often offer better financing deals on new vehicles versus used vehicles. This is why you’ll often see offers for zero percent financing on new vehicles.
Benefits of Buying a Used Vehicle
Buying a new vehicle may be more alluring than buying a used vehicle, but buying used has its own advantages. First and foremost: A used vehicle could cost less to purchase than a brand new model of the same car.
Buying a used vehicle has other cost advantages, such as a lower registration fee and lower insurance fees. In many states, the registration fee is based on the total value of the car. If you buy a used car that is older and is worth less than that same make and model brand new, you’ll be asked to pay less to register it. On a similar note, your monthly car insurance payment could be lower because that is related in part to the overall value of the vehicle.
The final main benefit of purchasing a used vehicle is that used vehicles may depreciate, or lose their value, slower than brand new vehicles. New vehicles lose up to 10 percent of their value as soon as they are driven home from the dealership. A used vehicle, if properly maintained, will typically see a much slower loss of value over the first few years. Slower depreciation means that you’ll get more money down the line even if you decide to trade-in or sell your vehicle in just one year.
Do you need help financing your car? Let us know!
Let Camino help you. We want our members to find the best option that works for their needs. We offer competitive auto loan rates. Please go online at caminofcu.org, give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information.