New or Used: Making the Best Car Buying Decision for You

key-791390_640The answer to the question of whether your next car purchase should be a new or used model depends entirely on who is asking the question.

There is not one straightforward set of rules to help you decide which is the best option and it all depends on a number of different factors such as how much deposit you have and what whether you have a car to trade-in with equity.

Here is a look at some of the key questions and factors that you need to consider so that you can decide which car-buying route is the best one for you.

Do you have enough of a down payment?

Before you check the stock at or wherever else you are searching out a vehicle, it makes a lot of sense to evaluate your current buying position.

If you have a good credit score you might be able to get yourself a brand new car with only a small amount of down payment to offer, or sometimes no deposit at all.

Many car manufacturers are keen to offer customers some incentives in order to try and persuade them to buy new, and these are often deals that simply aren’t available on a used car.

Depreciation matters

It is a great feeling driving away from the showroom in your shiny brand new car, but that experience comes at a cost.

You should always weigh up the desire to own a new car, which might well be available on a great finance deal, with the fact that the moment you become the first owner of the vehicle, you are going to be the one taking that new-car depreciation hit.

Different models tend to depreciate at a greater or lesser speed and extent depending on how popular the brand is and what level of demand there is for the used models when they come onto the market.

The fact of the matter is that every new car, regardless of make, model and price, will lose on average anywhere between 20% and 30% almost immediately it is driven away from the showroom.

If you really want a new car and are happy buying it in the knowledge that it will be worth roughly 75% of what you paid for it two years later or less, then at least you are buying despite the fact that you are aware of the depreciation you face.

Maintenance and repairs

One of the reasons why some people are prepared to buy new over a used car is the cost of maintenance and repairs, which should in theory be lower with a brand new model compared to an older vehicle.

You might be able to get a new car deal that includes your servicing and maintenance costs as part of the package, but you will almost certainly be paying for that privilege in the price you pay.

If you buy a used car that has done 30,000 miles or more, there are going to be some parts that will need replacing at some point and some repairs along the way will be almost inevitable.

The point to remember is that a used car with that profile will cost you considerably less than a new model and you won’t be taking the depreciation hit, as the previous owner has done that for you.

As long as you are prepared and have the finances to pay for the repairs and maintenance costs, a used car starts to look attractive when you see the price tag compared to new, especially when you consider that if you buy a nearly-new model, you might even inherit some remaining warranty period.

Finding the right deal

Only you can decide what sort of deal will suit your finances and the depreciation issue is not such a concern if you intend to own the car for most of its life.

If you like to change vehicles every couple of years, buying new could get expensive so provided you know what to expect in maintenance and running costs, you might be better off choosing a used car, which will also often be cheaper to insure too.

Work out not just what model you want to buy but also decide what type of deal would suit your finances the best. That way, when you head to the used car lot or showroom, you will at least know exactly what you are looking for and can concentrate more on getting the car you want at the right price.

John Sumner has been a trade buyer for many years and is always willing to share his car buying tips and insights with an online audience. He is a regular writer for a number of consumer and motoring websites.

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