Brand New or Second Hand Car Loan: Which is Better?

While the chances of getting your own car are becoming easier by the day, another dilemma that most car buyers face nowadays is whether to buy a brand new or a second-hand car. Of course, the default choice is to have a brand new spanking vehicle. That, if you have the money to spare. But what if you’re on a tight budget or you’re the type of person whose buying personality leans on the practical side? How do you weigh the odds of buying or leasing a car considering your personal preferences as well as your needs for comfortable driving?

Here, we look into the pros and cons between a brand new vehicle or second-hand car loan to make a comparison which is better to apply for. We, at Global Dominion, would like not only to help you in the process of taking that much-desired road beast into your garage but also to help you make the best decision and avoid regret in the future.

Pros of a Brand New Car

1. It’s in top condition.

Of course, a never-before-used vehicle is bound to have the best condition as it just comes out of the production and quality assurance line. You’re assured every piece of gear, metal, and wheel works as it should.

2. It comes with a warranty.

With a warranty for years, although different for some parts, nothing beats driving with peace of mind knowing that no matter what happens, you’re covered and secured.

3. It’s easier to acquire.

When you opt for a brand new car, all you have to do most of the time is walk into a showroom, talk to a sales representative, and pay for your purchase. Voila, you can drive out there even before the sun sets.

Cons of a Brand New Car

1. It’s expensive.

Unless you have the cash to spare for a spanking brand new car, a new model may take quite a few more bucks compared to a second hand one. You better think twice whether it is right up your financial alley.

2. It ties you up to a monthly amortization.

Even though car mortgages have eased up these past few years, paying for a monthly car loan for at least 5 years may be a burden especially if you’re barely keeping your head above the water.

3. It’s not owned by you.

Getting a brand new car is usually backed by bank financing, therefore, they own your automobile until you’re able to complete your loan payment. And if you fail to pay, your car may be repossessed.

Pros of a Second-hand Car

1. It costs less.

It’s pretty obvious a second-hand car costs much less than a brand new one. Not only that, you also have a chance to bag a much desirable model for a price that might only get you a low-tier model if it’s brand new.

2. It depreciates less.

There’s no stopping the depreciation value of your car once it gets out of the dealership. Second-hand car owners take less to none of this blow since the first owners already took that for you.

3. It’s owned by you.

Since a second-hand car is more affordable, you can opt to buy the car outright if it fits your budget. That way, you don’t have to worry about monthly amortization and high car insurance.

Cons of a Second-hand Car

1. It has a hidden history.

Unless the previous owner is totally honest with you, which is possible but mostly impossible, a second-hand deal might hide “dark” history that could jeopardize your driving experience in the future.

2. It takes time to purchase.

Getting a second-hand item requires a lot of investigation. Aside from the history, current condition, mileage, and so forth; you need to compare and contrast models, prices, trustworthy dealers, and etc. to buy the car.

3. It has less insurance premium.

Although second-hand cars can still be insured, you can’t expect the same amount as that of a brand new one. Car insurance companies want to make sure the repair costs don’t exceed the value of your car.

Having laid out some of the important advantages and disadvantages between a brand new car and a second-hand car, it still all boils down to your financial capability and preference. One thing you should also remember is that having a car requires long-term commitment.

You don’t just buy a car and then drive it all the way to wherever you want, whenever you want, and however you want. You need to take care of it, bring it in for maintenance and repair, and feed it gasoline.

What we’re saying is, it’s not a one-time spend. So, whether you think you’re qualified for a brand new car or you just want to be more practical for now, don’t just toss a coin. Make sure you study all the possibilities before you make the purchase. Also, make sure you’re up for it in the years to come.