Investing in a car is expensive and it is important to ask the right questions. New car? Second hand? Here are some answers.
The license in hand, it remains only to invest in a car but it can cost you dearly. And to buy a car, you must take into account your needs, your desires, the price, the cost of its operation (maintenance, fuel, insurance), its value for resale … there are many criteria that intervene in the choice you have to make.
By stopping on the price for example, you may be tempted by the purchase of a second-hand vehicle. In this case, the question is whether a used car is a good investment or not? Let’s see what it is and some alternatives you can have.
What does the purchase of a car entail?
Buying a car is an important investment that does not stop at the act of purchase. In addition to the acquisition price of the vehicle, it is necessary to count the cost of its operation which engulfs the auto insurance, the maintenance and the full of fuel. Also, the vehicle purchased at a resale value should be included in the calculations.
The advantages and disadvantages of a used car
The used car has the advantage:
- to cost less to buy. Since new vehicles are often financed with a car loan, the cost of credit is added to the purchase price of these vehicles. In addition, with the same budget, you can acquire a model of high-end opportunity in place of a new basic model.
- to have insurance costs lower than those of new cars. The all risk cover is not necessarily essential for a second-hand vehicle.
- to depreciate less quickly when reselling the opposite of a new car that depreciates by ¾ of its value in 5 years.
On the other hand, she:
- costs more in maintenance compared to a new vehicle. Mechanical parts wear out over time and need to be periodically changed. The frequency of these changes is greater for older models. In addition, the new car benefits from the constructive guarantee which allows for controlled overhaul costs.
- consumes more fuel and its greed can result in pollution taxes that add to the expenses
- inspires less confidence in resale, especially when the history of the vehicle is unclear. This means that at the same mileage and age, a new car will be resold faster and more expensive.
Is the used car a good investment?
If one considers in addition to the purchase price the cost of use, the purchase of the used vehicle does not seem to be a good investment. Especially since it can book you unpleasant surprises after acquisition. For this reason, it is recommended that you buy the used and used car in good condition from a professional.
There are, however, several types of second-hand vehicles. There are some that are recent and others that are older. Buying a newer used car can be a good deal.
Alternatives to the occasion
With a newer model, you keep the price advantage and the manufacturer’s warranty. As these are vehicles to be resold in concession, they enjoy good maintenance often accompanied by extended warranty services provided by manufacturers. On the other hand reselling will be slower than a new model.
The other option is to buy new. Even if you have to go through a car loan, you are sure to minimize the risks on your investment.
The used car can be a good investment especially when it is recent and able to obtain the widest possible insurance coverage. However, a new vehicle is always less expensive to operate.