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Buying a Car

There are plenty of choices when looking for a car. Apart from figuring out what make and model you want, you’ll also need to figure out whether you want new or used.

We know, buying a new car sounds like more fun than going with a used one. They’re shiny, have that new car smell and may even impress your friends. But if you’re looking to take a more practical, and affordable, approach to car buying –a used car may be more your speed.

5 Reasons to Buy a New Car

  1. They’re more reliable. Kind of a no-brainer. But something good to keep in mind if you aren’t comfortable with car repair, or don’t want to keep pouring out money on the inevitable problems of a used one.
  2. They come with a better warranty. New car warranties are getting better all the time and they’re a great reason to go with a new car. You may be paying a bit more for new, but you’ll probably be paying less on the upkeep.
  3. Better features. Thanks to modern and green technology, new cars are getting safer for you and better for the environment every year. So, if the newest gadgets and/or hybrid capabilities are important to you, then think new.
  4. Tax credits. You’ll need to do your homework first. But depending on what kind of vehicle you purchase, you could be in for a tax credit for electric or hybrid cars, or a stimulus-funded credit. Check out the Department of Energy’s site for details.
  5. Better financing terms. Most automakers have decent incentives or rebates on some or all of their models these days. When you buy new, you can take advantage of these discounts. If you decide to get financing on your own, your credit union’s already low interest rates might actually be lower on a new vs. used vehicle.

5 Reasons to Buy a Used Car

  1. They don’t depreciate like a new one. On average, a new car will depreciate in value 40% within the first three years. When you buy a new one, the depreciation is already factored in.
  2. Cheaper insurance. It costs way less to insure a used car than a new one.
  3. Cheaper purchase price. For the savvy car shopper, you’re more likely to find the car you want at the price you want and save yourself some cash.
  4. Think certified pre-owned. Many car dealers sell certified pre-owned vehicles these days, which means they come with a warranty.
  5. Learning the history. Thanks to all the programs out there that track a car’s history through its vehicle identification number (VIN), you’ll know if you’re looking at a lemon.

If you’ve decided that a new car is the way to go, get some pointers on what to do next with our Buying a New Car section. Thinking used is the way to go? Buying a Used Car can help.

Don’t know what you can afford? Check out our loan calculator to help you crunch the numbers.