It’s inspiring to buy your first car, especially a new car. But why do people feel great for purchasing a brand-new car? Is it because they have spent more? Or could it be that new cars are designed using the latest technology? What could be the reason behind the pride in purchasing a new car?
Surprisingly, these are not the only reasons why people opt for a new car. Sure, there are many other reasons why people go for new cars. And, you could secure better car loan interest rates to purchase your car.
Brand new cars will spare you the agony of visiting the garage every now and again. You won’t even think of changing the breaks of your car because no one has ever used it. The list of advantages is just painfully long.
But should you still buy a new car if you can secure used car loans? Below are four reasons why buying a new car is not the recommended route to take:
1. You’ll pay more
If you are earning way much than you need, then you probably won’t mind either purchasing a new or used car. But if you always find yourself struggling to pay your bills, then you need a monthly budget that won’t give you a headache.
The best of all is that nowadays, buying a car doesn’t stress unlike some years back. You could get a car loan and purchase a car instantly. In most cases, you will find banks competing to give you the best rates if only you have a good credit score.
The sad news though is that whether or not you secure a car loan, purchasing a new car will be way much expensive. It’s not only because of the car’s higher price, but also other costs that you’ll incur along. Besides, you could end up paying more if your car is new.
2. Negative equity and depreciation
You may not like this, but truth be told: new cars depreciate at a faster rate than used cars. A new car depreciates at an average percentage of 19 per cent in its first year. Is that something you’d want to encounter? To add salt to your injury, if you purchase a brand-new car with no down payment, you’re likely to have more debt than the amount your car cost. That’s sad.
3. You don’t get more for less
There is a secret you probably don’t know. Should you know it? Well, when you buy a second-hand car, you get more for less – you pay less, but get quality.
Think of it this way: If a car costs two million Indian rupees this year and buy it. When someone wants to buy it the next year, it may go for 1.5 million Indian Rupees.
By this time, you’ll be selling it, everything will be intact – sunroof, leather seats, JBL sound system, rims, etc. Is that a deal you’d love?
4. Used cars are reliable compared to new cars
If you can remember, cars that were made a few years ago never lasted. You would buy them, drive for two to three years and dump them because they were no more. Nowadays, modern technology has affected the efficient making of cars, hence modern used cars are more reliable compared to entirely brand-new cars.
Bottom Line
If you have a shoestring budget, take advantage of some of the benefits of a used car, then you deserve one. Go for it!
