Pros and Cons of Buying A New Vehicle

You're probably looking to buy a car right now if you're reading this.  

The first question you should ask yourself is, “What kind of car do I want to buy?”  The next question you’ll probably be thinking is, “What kind of car can I afford?”  Hopefully, this will help narrow down your choices before you visit the dealership.

Check out our list of pros and cons to weigh your options and optimize your car buying experience.

New Cars

There is nothing better than being the first to use a brand new car, truck, or SUV. In addition to having that "new car smell," new vehicles also come with minimal or no miles on them, and are equipped with the latest technology available!  Plus, did you know that you can save money on financing a new car?  Interest rates are typically lower for a new car because lenders know the value of it and also know that the borrower will pay back the loan.  Many manufacturers will offer cash rebates or even a 0% interest rate for a specified period of time on top of a low interest rate. This saves you even more money over time.

While it’s true that new vehicle financing can save you money on interest, car insurance and sales tax are still quite expensive.  Usually, the sales tax isn’t included in the advertised pricing, so when you review the bill, you may be shocked by how much is added on.  You can find out what your local sales tax rate is on the Department of Revenue website. Auto insurance is another expensive component of a new car.  For a new vehicle, most lenders will require collision, comprehensive, and gap insurance.  These insurance packages can add up quickly and make your new car more expensive than you initially thought it would be.

Pros

• Cheaper to finance (low interest rate)

• Manufacturer warranty

• Little to no miles

• Find the exact model and trim you’re looking for

• Finance and special offers through manufacturer

• New technology

• No waiting for the title

 Cons

• Price

• Faster depreciation rate

• Expensive sales tax and auto insurance

Shopping for a new car can be both thrilling and frustrating.  There are so many choices to pick from, it’s hard to decide where to start.  If you’re not convinced on buying a brand new vehicle, check out next week's blog to explore the benefits and drawbacks of buying a used one.