The whole globe has felt the twitches in the economy as the direct result of the COVID-19 pandemic. Buying a car is not easy in today’s situation though it is the safest option for many. With the up-gradation of every component, a new car costs a big buck. Therefore, it’s very important to ponder the most significant question: Should I buy a new car or a used one during the ongoing pandemic?
In this blog, we’ll be clearing your doubts about these options. We will look at the pros and cons of both to help you identify the most cost-effective option.
Pros of buying a new car
- Maintenance cost is less
For the first few kilometers of its running or six months of its purchase, no maintenance is required for a new car. Subsequent to it, you might need servicing. The cherry on the cake is, many car owners get the pleasure of free services for the first few months. However, the months may vary from company to company. Well, this is not the case with used cars.
- Comes with a warranty
Most of the new cars arrive with a warranty package. Generally, the warranty covers 3 years or 60,000 miles on average. Also, nowadays, it’s common to come with a 10 year or 1,00,000 miles powertrain warranty. Some dealers also offer extended warranty beyond the manufacturer’s expiration date for lesser money. But not all pre-owned cars come with such warranties.
- It has the latest technology
Nowadays, the latest technology gets outdated in six months or one year. So, in a new car, you’ll get advanced technologies and features in terms of equipment and accessories. There are some must-have tech accessories of the car like a built-in MP3 player, internet access, etc. All will be available when buying a new car. But in the case of the pre-owned car, you need to invest in it separately.
Cons of buying a new car
- The depreciation rate is higher
Let’s take a deep dive into the statistics first! The depreciation rate of a new car is approximately 20% annually. And it happens in the first three years of its purchase. Even if you keep your car in good condition, its value will lessen by at least 40%. If you buy expensive cars, then the depreciation rate would be worse. However, the depreciation rate of a used car highly depends on its condition. But it’s a lot lesser than the new car.
- The insurance premium is higher
Every car dealership will ask you to carry full coverage on your car until it’s paid in full. You might already be aware that the premium of car insurance depends on several factors. One of the main aspects is the age of the car (and driver). That means, the newer your car is, the more insurance premium you have to pay for it.
- Model’s components get altered
This is another main disadvantage of buying a new car. Imagine you brought a new model, the one you’ve dreamt of, and its engine wears; you go to change it, but by that time, the car model which you own, its engine gets altered or designed in a new way. When you buy a pre-owned one, you can avoid this con.
Pros of a used car
- Cost savings
A new car starts depreciating the moment it’s driven on the road. Therefore, it’s a no-brainer that the cost of a used car is less than the brand new one. Also, while buying the used one, you don’t have to worry about its registration fees, road taxes, etc., because the previous owner has already paid for it. All this means, buying a pre-owned car makes it possible for you to own an expensive car at half of the price of its new one. And this solves your budget issues considerably in the COVID-19 pandemic.
- Payless for insurance
Another great advantage is that you typically have to pay less for the insurance depending on the model. As said in the above point, an insurance premium depends on the age of the car and the driver. So, if your age is less and your car’s age is more, then you will have to pay less premium amount. It is because as the car gets older, it’s simply cheaper to insure.
Cons of a used car
- Options are less
The primary disadvantage of buying a used car is the limited options in comparison to new cars. From the model to its color, you have to compromise. Whichever color and model are available with the car dealers, you have to pick from it. For many, it will not be a satisfying purchase.
- Huge repairing bills
Though the car dealership inspects the cars and does the required repair work to make them look brand new, you are still unknown of the repairing costs. In addition to this, you will be required to pay a higher interest rate if the car is purchased on loan. Therefore, you can try to buy a car that’s three years old. Also, it’s advisable to set aside a few bucks to cover any uncertain car repairs that come up.
- No or less warranty coverage
Another con of buying a used car is you may not be provided with warranty coverage for any car damage. If provided, it would be lesser than it’s given for a brand-new car. As a consequence, you need to pay extra for all such repair costs. To save yourself from sudden repairs, you should check the history of the car that you’re buying. However, in some cases, even the history will be hidden, making it an unreliable purchase.
It’s the hour of decision
Every one of you who’ve read the blog just now needs to decide for themselves what the best option is. On one side, a new car brings happiness of color of your choice, latest technology including a mobile phone holder that has a lot of benefits, etc. On the flip side, there are used car option, which saves money, but you need to compromise on a few things. Whatever the decision would be, you should research properly about the car model and pick the one based on its reviews and reliability.