Vehicle Purchase: Should I Buy a New or Used Car?

Is it everyone’s dream to drive off a car dealership’s lot with a new car? Probably, but everyone also has to practice some fiscal responsibility. Those who have the disposable income set aside for a new vehicle purchase as a treat to themselves earned it. Even they should consider the better value, a new or used car.

Brand

Some car brands hold up better than others. When they hit the secondary-market, they are still an attractive deal. A used car is not always the clunker that no one wants anymore. Vehicles end up on the used market for a number of reasons such as buyer’s remorse, upgrades and leases. A car may have 10,000 kilometres on it, but it is a solid brand. The brand is known to reach 100,000 with little problems. Buying it on the secondary market saves you a good chunk of change.

Car Loan

A car loan may dictate the vehicle you can purchase. A lender advises you that they are willing to finance $20,000. Then, you are probably going to purchase a vehicle just under that amount. For some $20,000 is enough to complete a new vehicle purchase because the difference is paid with a down payment. Before you step on the car dealer’s lot, find out how much financing you qualify for with a lender.

Opportunity Cost

If you walk onto the dealer’s lot with $30,000 in cash and financing, do you spend it all? Consider the opportunity cost. If you opt for a $20,000 vehicle purchase, is there something you can do with the other $10,000? Making money work for you is worthwhile, too. Cars are necessary, but they are also a depreciating asset. 

Vehicle Purchase Conclusion

If you want to explore your vehicle purchase options, our Mortgage House financial professionals are ready to help. We can walk you through some scenarios, and you can use our car loan calculator for free.