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New or Used – When it Comes to Cars, What Should You Buy?

Posted by Auto Loan Solutions

There are a lot of decisions to be made when buying a new (or new to you) vehicle. Do you need a car or a truck? Is the upfront expense of a hybrid vehicle worth it based on the money you could save on fuel because of the amount of driving that you do? Choosing the right vehicle for your needs is a complicated decision. One of the decisions you’re going to have to make first is whether you should go with a new or a used vehicle.

In the Greater Toronto Area, there is a virtually unlimited supply of vehicles to choose from on a daily basis. New and used cars each come with their own set of benefits and drawbacks. Before you decide what to do, let’s have a look at the benefits of new cars, and what sets used vehicles ahead of the pack.

Considering a New Car

Aside from the “new car smell” that has been immortalized in an air freshener, there are a lot of positives to be said for buying a new vehicle. When you buy a brand new car, you get to choose what bells and whistles you want, and which ones you definitely don’t want. It’s geared to your wants, needs and desires. A new vehicle also has the latest features that might not have been available in the same model even just a couple of years ago. There is also the new car warranty to consider, which will offer some protection against expensive repairs in the early years of ownership. Finally, there are the dealer offers and incentives that are often only available on new car purchases, making it a very attractive prospect indeed.

The key objection to purchasing a brand new car or truck is the cost. In short, brand new cars are expensive, and all of the associated taxes and fees, which are a percentage of the price of the vehicle, are higher as well. Then there is the notion of depreciating assets. The minute the car drives off the lot with a new owner, the value of that vehicle drops by up to 10 percent. By year five, that same vehicle has lost over half of its value, and you may not have even finished paying it off yet. Furthermore, many of those dealer offers and incentives may only be available to those with an unblemished credit history. If you are hoping to make a vehicle purchase after qualifying for auto financing with no credit or a bad credit car loan, some of those enticements won’t apply.

Considering a Used Car

Used cars have the obvious advantage of being much less expensive. The immediate loss in the value of the vehicle has already been absorbed by the time you take ownership of the car or truck. You can often find the car of your dreams that is only a year or two old. In some cases, you may even be able to assume the warranty coverage as part of your purchase. This gives you all of the perks of buying a new vehicle, but takes some of the sting out of the hefty price tag. With many of the major automobile manufacturers offering certified used versions of their vehicles right alongside the new cars and trucks, there are some major savings to be had by purchasing a used vehicle.

Now for the drawbacks… Especially if yours is a private purchase, you always need to be sure to do your due diligence when buying a used car. Ask yourself why someone is getting rid of this car after only a year or two. Ask for the service records, and pay close attention. Maybe they’re unloading it because it has been in a major accident and they’re hoping to make the damage someone else’s problem. This is not to suggest that people selling their relatively new vehicles are dishonest, there are a number of very valid reasons to sell a car you haven’t had for very long. It just means that you, as the purchaser, need to be sure to ask the right questions.

Deciding Between the Two

Ultimately your budget will be the biggest consideration, but your personal preferences will still factor into your decision making process. If you can afford it and you would rather not have any surprises in the first few years of owning your new vehicle, then a new car may be the best choice for you. However, if you would prefer that someone else absorb the impact of those initial fees and taxes, a used vehicle may well be your best bet.

When buying used, a private purchase may save you some money upfront, but you have very little recourse if or when something goes wrong with the “brand new to you” vehicle. You’re also going to have to kick a lot of tires and spend a lot of time going to see and test drive cars at different locations. Choosing to work with a dealership provides a reputation and service standard that they are eager to uphold, and the opportunity to see lots of the same or similar vehicles at a time, in the same place. It’s a level of convenience that you may find well worth it as you save considerable time when shopping for your new vehicle.

If you have been holding off on buying a new vehicle because you don’t think that you will qualify for financing because of your past credit troubles, Auto Loan Solutions knows just what to do. We have been helping people just like you get behind the wheel of the car of their dreams since 1959. Bad credit or no credit? No problem! We have the automotive financing solutions you need right now.

If you know someone struggling to choose between new or used for their next vehicle purchase, consider sharing this post with them. While you’re logged into Facebook, come on over and like our page. We share personal finance and car maintenance tips regularly with our growing online community.

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