The first basic question that runs havoc in our minds when buying a car is whether to buy a used car or a new car? However, people think of real savings. This is just because they don’t want to invest in buying a car that increases their expenses. However, there may be many reasons to buy a new car but it’s not the same for everyone. Used cars in el cajon might help you in making a right decision.
It is true that every car has depreciation period and this applies to new cars too. Therefore you may also check on the advantages of buying a used car in terms of your financial requirements.
Financial requirements: The moment you decide to replace your car you question yourself on the chances of finding a buyer for your used car. The next thing would be pricing your car based on the miles travelled considering the depreciation cost of the model. At the same time you might wonder if you Will you be able to Afford a new car? A little introspection does no harm and you have to try this on your wallet when you think of Used cars in el cajon.
New Car: You might succeed in finding a large manufacturer offering an incentive while buying a new car. They may offer free maintenance for some time. This may look fair in the initial years of the new-car owner ship but not until it takes a Depreciation hit. New cars drastically lose value overtime. Even though you wait for an opportunity to cover the down-payment requirements there is no good reason to back your financial investment. Besides this can’t be called a wise investment at all mainly due to the following reasons:
Hidden costs: Sharp fall in price just a day after the purchase of the new-car is an evident example of how you lose all the money in a gamble. These are all hidden cost that includes on-road taxes that you would never get back on the day you decide to sell it.
Maintenance: The maintenance cost may not look huge in the first year. However the price of the spare parts remains the same and the value of the car goes down. The new parts when fitted to your car lose value. This is a sharp hit on the maintenance end.
According to a study, the cost of a car falls by 20 to 30% soon after the purchase. When rolled off to a dealer it can even fall to half the rate of the purchase price.
An older car or used car is often considered a smarter move and is a sharp contrast to the average cost of a new car and its maintenance. This is mainly due to the following reasons
Save on purchase price:
In the first 3 years itself a new car loses its value by 50% percent. This means a huge loss in comparison to the purchase price. One of the benefits of buying a used car is in its savings in the purchase price that doesn’t take a plunge, unlike new ones.
Dealers offer warranty period for used cars. This means you can afford on expenses incurred on maintenance including repair costs. A protection for a couple of years or months again turns into savings besides savings on purchase price.
Depreciation has little effect:
Lower insurance premiums and lower taxes can be fair on your wallet and at the same time depreciation has little or no effect on used cars. So this might translate to savings if you don’t mind driving an old car until the wheels falls off.