Pros and Cons of Buying A New Vehicle

If you’re reading this, you’re probably shopping for a car right now.  

It is important to ask yourself, “What kind of car do I want to buy? ” The next question you will ask is, “What kind of car can I afford?”  Before you visit the dealership, let’s narrow down your options.

We’ve compiled a list of pros and cons so you can weigh your options and optimize your car-buying experience.

New Cars

It’s a thrilling experience to be the first to use a brand new car, truck, or SUV. In addition to having that “new car smell,” new cars also come with minimal miles and are equipped with the latest technological advancements!  Additionally, did you know you can save money on new car financing?  A new car tends to have lower interest rates because lenders know how much it is worth and know the borrower will repay the loan.  In addition to a low interest rate, some manufacturers will offer a cash rebate or even 0% interest for a set period of time, saving you even more money in the long run.

Financed new vehicles can save you money on interest, but insurance and sales taxes are still fairly expensive.  When you review your bill, you may be surprised to find that sales tax wasn’t included in the advertised price. On your state’s Department of Revenue website, you can find out what your local sales tax rate is. An auto insurance policy is another more expensive component of a new car.  A lender will typically require collision, comprehensive, and gap insurance when financing a new vehicle.  It is possible for insurance costs to accumulate quickly and to increase more than you anticipated.

Pros

• Cheaper to finance (low interest rate)
• Manufacturer warranty
• Little to no miles
• Find the exact model and trim you’re looking for
• Finance and special offers through manufacturer
• New technology
• No waiting for the title

 Cons

• Price
• Faster depreciation rate
• Expensive sales tax and auto insurance

Shopping for a car can be both exciting and frustrating.  You may not know where to start with so many options available.  Next week’s blog will discuss the pros and cons of buying used vehicles if buying a new vehicle seems like the wrong choice for you.