Should you buy a new or used car?

 

If you’re in the market for a new car, you may be wondering whether buying with cash or getting a loan is the better option for your budget.

Or, maybe you’ve already made up your mind to buy rather than lease that new set of wheels but aren’t sure whether a brand new or second hand car would best fit your needs and budget. If so, this article is for you.

In this article, we’ll look at some of the key things to consider if you’re thinking about buying a new or used car. We’ll also compare buying vs getting a loan for a new and a second hand car so you can decide which option is better for your lifestyle and budget.

So, what are your reasons for buying a new or used car?

Reasons to buy a new car:

  • You want the latest vehicle technology
  • You don’t mind paying more for a brand-new vehicle with low mileage and full manufacturer’s warranty coverage.
  • Your goal is to keep your auto loan low.
  • You want the latest car technology because you have to have it all now. And who wants to pay for outdated tech?
  • Your goal is to keep your auto loan low because this will allow you to pay it off in the shortest amount of time.

Reasons to buy a used car:

  • You like to save money by buying pre-loved.
  • You like to buy a pre-owned vehicle that’s still in fine running condition, albeit it’s close to or already past its prime.
  • Your goal is to save money by paying less upfront for the car because you’re shopping for a used car rather than new.
  • Your goal is to save money by paying less upfront for the car because you’re shopping for a used car rather than new.

How are you going to finance your new car?

Once you’ve weighed up the benefits of both new and used cars, the next step is to decide how you’re going to finance it.

Buying it outright

Buying your car with cash is the most straightforward way to own a new vehicle. It’s also the most expensive since you’ve got to come up with the full purchase price upfront.

Getting a loan

If you decide to finance your car, securing an auto loan will cost you more in interest than paying for it outright and thus increase the total amount of money you’ll pay over time (i.e., the total cost of your car).

If you don’t have the cash to buy outright, getting a loan is often the most affordable way to own a new vehicle

One of the most popular types of loans is a secured loan. They involve pledging something you own as security for a loan (normally your car). Secured loans are typically offered at more affordable rates than non-secured personal loans because they have shorter repayment terms and their interest rate is based on your credit score, current income and the amount of money you’re borrowing.

You can also consider an unsecured loan if you don’t have a car of your own to use as collateral. This type of loan is offered by financial institutions like online lenders or banks that issue personal loans.

If you’re looking for the best car loans, it’s a good idea to shop around and compare your options online.