Selecting a vehicle is something that you need to do carefully. Depending on which one you want, the difference could be several thousand dollars. You need transportation, but you also must watch how much you spend.
With Covid-19 still ravaging this country, there’s a lot of belt-tightening going on. The evidence of this is the car commercials offering unreal deals. You can get great cars right now with 0% APR for five, six, or even seven years.
You might be new to the car buying process, so you’re uncertain about the best way to go. Let’s look at some of your options and figure out what makes the most sense for you.
The New Car Downside
There are positives if you want to get a brand-new car, but there are also distinct negatives. For one thing, new vehicles depreciate quite a bit the second you sign the papers and drive them off the lot. That’s thousands of dollars you can’t make back when you sell.
Also, your brand-new car is a rolling investment, and some people hesitate to put that much money on the road with so many careless drivers out there. The Pennsylvania Transportation Department says that 11,003 accidents happened in Philadelphia County in 2018. It’s similar in most major US cities.
The New Car Upside
There are compelling reasons you might want to at least consider buying a brand-new car, though. New cars:
- Have the very latest safety features
- Often have the latest tech
- Usually, come with a warranty to cover repairs for the first couple of years
There’s much less chance that something is going to break on your brand-new vehicle. If it does, the warranty covers it. You’re paying more up-front, but there will be fewer hidden repair costs when you get it out on the road.
Also, if you lease your new car rather than buy it, you can return it after a couple of years and look for something else. You also normally have the option of buying it at that point if you’ve fallen in love with that particular model.
Certified Pre-Owned Vehicles
Certified pre-owned refers to a vehicle that:
- Is usually sold by the manufacturing company
- Undergoes inspections and rigorous testing to make sure that it’s in excellent condition
Buying a certified pre-owned vehicle is like the middle ground between brand-new and used. You’re getting a car that’s probably not more than one or two years old. It should have lots of new tech and safety features, and there aren’t usually that many miles on it.
At the same time, it’s not going to be cheap. You’ll pay less for it than if it was brand new, but you’re still shelling out more than you would for a used vehicle.
If you go this route, you can often still get a warranty, it just won’t be for as long as a brand-new car, and it probably won’t cover quite as much if something goes wrong.
The term “used” when it comes to cars covers a very wide range. You can get a used car that’s in pretty good condition and will last you for many years.
You can also get one for a couple of hundred dollars that’s probably going to need tons of repairs before you can even drive it safely on residential streets.
The most significant appeal with used cars is the price. You can pay tens of thousands of dollars for a brand-new or certified pre-owned vehicle, and you can get a used one for a fraction of that. You might be able to buy a decent used car outright if you can scrape together a few thousand dollars.
Where you often lose money with used cars is with hidden costs. In many cases, used vehicles have tens of thousands of miles on them or more. You might get a car that seems like a bargain, but if there’s 150K miles on it, it might not be as dependable as you hope.
With used cars, the best thing to do is get it inspected by a competent mechanic before buying it. Get them to give the vehicle a complete once-over, looking at things like the engine, the exhaust system, etc.
What kind of car you want will depend on your priorities. If money is no object, then you might feel fine buying brand-new or certified pre-owned. If you need wheels and have limited capital, you’re likely headed to the used car lot instead.