Buying a new car is one of the biggest decisions that anyone can make, and ranks second in terms of value to your home. This makes it important for buyers of a new car to exercise care and due diligence before signing the sales agreement. Many amazing positives are associated with buying a new vehicle, and there are also red flags and caveats that you should be aware of. Here are a few pros and cons of buying a new car.
Pros of buying a new car
Low-Interest Rates
Recently, the interest rates on car loans have gone down, thanks to the intervention by the Federal Reserve. Depending on your credit condition, you could get a loan at an interest rate of 1.35 to drive the new car of your dreams.
Warranties
Most new vehicles come with a warranty that covers an average of 60,000 miles, or three years, whichever comes first. It’s not uncommon to find new vehicles that have a 10-year warranty, especially for transmission and power systems. There are even many instances where the dealer offers an extended warranty, so you can benefit from these amazing offers on new vehicles.
Latest technology
New cars come with modern technological features that help you drive better and enjoy a great experience while on the road. For instance, a new car will most likely have a new navigation system, a satellite radio, internet access, and an mp3 player. There are many great cars from the yesteryears which are the dream cars for some people, but they will not have these amazing technological features.
The cons of buying a new car
Even with the endless benefits that a new car offers, there are still a few drawbacks that are associated with such a decision.
Depreciation
It is estimated that a new car loses 11% of its value as soon as you roll it out of the yard. If you take a five-year loan to buy a car, by the time you will be completing the repayment of the loan, your car will be worth just 40 percent of its original value. This is only if you take great care of it. You will find that the rate of depreciation of high-end cars is even worse.
Insurance
Financiers and dealerships will push the cost of insuring your vehicle to you until when the amount is fully paid. Many factors determine how much premium you will be paying and among them are the age of the driver as well as that of the vehicle. The premium that you will pay for a new vehicle will be higher than when you buy a used one.
Return on Investment
There is no return on investment that you get when you buy a new car. A new car is luxurious and will raise your image, but you cannot compare it with real estate because it will always help you make money. However, if you need replacement parts for your new car, don’t hesitate to get second-hand parts because they are equally as good as new ones When looking for used auto parts New York residents understand that there are great options to choose from.
