Pros and Cons of Buying a New Car

You're probably in the middle of shopping for a car right now if you're reading this.  

One of the first questions you should ask yourself is, “What kind of car do I want to buy?”  Then the very next question you’ll be thinking is, “What kind of car can I afford?”  To narrow down your choices before going to the dealership, let's help answer those questions.

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

New Cars

Nothing beats driving a brand new car, truck, or SUV for the first time. Not only do new vehicles come with that “new car smell,” but they also come with minimal to no miles on them and are equipped with the newest technology the industry has to offer!  Plus, did you know that you can save money on financing a new car?  The interest rate on a new car is typically lower since lenders know its value and also know the borrower will repay it.  On top of a low interest rate, some manufacturers will offer a cash rebate or even a 0% interest rate for a certain amount of time, saving you even more money in the long run.

Even though financing a new vehicle can save you money on interest, auto insurance and sales tax are still going to be rather pricey.  In most cases, the sales tax is not included in the advertised price, so you may be surprised when you see the bill.  The Department of Revenue website can tell you what your local sales tax rate is. The other pricey component to a new car is auto insurance.  For a new vehicle, most lenders will require collision, comprehensive, and gap insurance.  Your new car's insurance package could end up costing more than you initially anticipated.

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

Car shopping can be both a wonderful and frustrating experience.  With so many options available, it's hard to know where to begin.  For those who don't think a new vehicle is the best option for them, stay tuned for next week's blog about the benefits and drawbacks of buying used vehicles.