WHAT TO KNOW BEFORE BUYING A NEW CAR
Apart from the purchase of your first home or property, buying a new vehicle will most likely be one of the largest monetary investments you’ll make. The knowledge of this fact should prompt potential car buyers to patiently consider their choice before signing a deal for a car. However, many people rush into making a decision without weighing the costs. Most people are enticed by the concept of purchasing and owning a brand new car, so much so that they forgo any disadvantages that may come with it. While there are many advantages that come with purchasing a brand new vehicle there are also some pitfalls that should be considered.
- LOW-INTEREST RATES: Any laws or enactments put in place that limit interest rates placed on any loans eventually extend to auto loans as well. One of such companies, Scottsdale Hyundai could offer an interest of up to 1.35%, depending on your credit situation.
- WARRANTIES: Most vehicles are covered by a manufacturer’s warranty that covers up to three years or 60,000 miles. Some vehicles even come with warranties covering powertrain(engine and transmission) up to 10 years or 100,000 miles. The dealer may occasionally offer an extension to the warranty beyond the manufacturer’s expiration date.
- THE LATEST TECHNOLOGY: A used car may be cheaper than a new one and could even be your dream car as are vintage cars. However, a 1990 Camaro won’t have a navigation system, internet access, satellites radio, or a built-in Mp3 player like the 2018 model has. Newer vehicles also have the added advantage of being able to go upwards of 10,000 miles between oil changes because of their improved design. Lane departure warnings, collision avoidance systems and self-parking are also other advantages of new cars.
- DEPRECIATION: This is the greatest disadvantage of buying a brand new car. It is said that you lose up to 20 percent of a car’s value the moment you drive it out of the car dealership. By the time it’s been five years since you’ve bought the car, it will probably be worth about 40 percent of its original value, and that’s when you’ve taken good care of it. The depreciation rate happens to me even greater with more expensive cars.
- INSURANCE: All car dealerships and finance institutions will expect you to pay for full coverage on your vehicle until it is paid for completely. Insurance premiums depend on many different factors, including the age of the vehicle. Therefore, the newer the vehicle being insured, the higher the premium will be.
- RETURN ON INVESTMENT: Whether you may like to admit it or not, a car will turn out to be a liability by definition, instead of an asset. No matter where you buy a car, what brand you purchase, and how well you take care of the vehicle, you will not turn in any sort of profit when reselling the car. Any car will probably be resold with losses of up to 50 percent or more.
The choice of buying a new or used car eventually boils down to your budget, and your preferences as well. However, it is wise to patiently and carefully research your options before making any decisions.
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