(This is a guest article by Miles Walker*)
The debate on whether to buy a used car or new car rages on, with both sides justifying their choice vehemently. With the on going recession and the economy being down, we have a few more people jumping on to this side of the fence, where we like our good old cars. Here are my ten reasons for why buying a new car is not a great idea.
While many people live in areas that require some sort of motorized transportation, buying a brand new car right off the showroom floor is not necessarily a wise move. Once the ink is dried on the contract and the car is driven off of the lot, the value of the vehicle depreciates greatly, in some cases by half of the car’s worth. Buying a used car is more financially wise because the car has already had the “bugs” worked out of it. It has also stopped depreciating and many have begun to increase in its value.
The insurance cost of many new cars is incredibly high. The reasons for this varies with the make and model of the car that is bought, but some major ones will be sited here. Many insurance companies raise the rates of new cars because they have the most chance of their parts being recalled. For example, the recent Toyota recalls that concern the Corollas between 2005 and 2008 are not only a hassle for the owners of those cars, but also a huge liability with the three crashes and resulting injuries that have been linked to the accidents of these faulty systems. Another reason is that the accident rates for new cars are higher than the accident rate for older cars. The reason for this is unknown, but theorized that the newer cars may have problems with the braking systems that the older cars have already corrected. The age of the drivers with a new car is a factor as well, as it is with older cars, but one must remember that the younger the driver is, the higher their insurance rates will be.
The issue of the cost of gas is always a touchy subject with drivers. While that may not matter to people who live within a 5 mile radius of their work, it could matter greatly to the commuter who has to drive one hour to work and back home every day. That commuter has to fill up their gas tank every week because their round trip journey is nearly 50 miles a day. If one chooses to buy an SVU or a heavy duty truck, these vehicles are known as “gas guzzlers” and will use more gas than a sedan or smaller hybrid car would.
4. Family Finances:
When purchasing a car to fit into the family’s needs, buying a new car simply may not be an option. A new car can easily cost as much as a second mortgage and with parents losing their jobs, a new car would cause more unneeded stress. If the family buys a used car which can be bought outright for a few thousand dollars, it will save them a lot of heartache and worry about bills.
The parts for an older car are considerably less in price and more available than the parts of a new car. They may also be available online, where the price for them could be even lower than at a store.
While a car warranty may not come with every used car, depending upon where it is purchased, if the warranty is offered, buying it could help save a lot of money in the long run. Depending upon how long the owner plans to have this car, having a warranty will keep money in the wallet of the car buyer. The warranty of the new car will be included in the price and may not last for the entire life of the loan for the new car.
7. Changes in Needs:
Many families change through months or even years. If a family of two purchases a sporty 1984 IROCK that only seats two comfortably and 4 months later, she is pregnant, it is much easier to sell the IROCK and buy a bigger car than it would be if the couple purchased a new car because of the ensuing loan.
8. Resale Value:
Older cars, specifically classic cars, add to their value regardless of whether they are restored or not. A car collector may offer to purchase the car, if they see potential in it, even if the car is not for sale.
9. Restoration Fun:
If the car owner has purchased a car that he loves, restoring it to its former glory can be just as fun as any other hobby. This can be a family affair and the love of cars can be passed down through the family from parent to child.
10. Saving Money in General:
Not only will a used car save the owner money through insurance, parts, gas, and warranties, but it can also save on other aspects of the car. For example, buying tires for the old car can be cheaper because the tires are also made for many different types of cars, causing the manufacturing of the tires to be cheaper than a new car’s tires.
*About the author: Miles Walker is a freelance writer and blogger who usually compares car insurance deals over at CarinsuranceComparison.Org.