Despite big promotional events and appealing advertisements, new cars come with hefty price tags and lose their value quickly due to depreciation. In fact, there are several benefits to getting a used car for affordable over a completely new one.
However, there are a few specific occasions when a brand new car isn’t just a luxury indulgence and a way to pamper yourself. It actually makes more sense to purchase new in these instances.
In the six situations below, a new car might be the wise and worthwhile purchase for you.
Benefits of Getting a New Car
1. New Safety Technology
In the automobile industry, the amazing power of computer processors has sparked a technology revolution, and manufacturers are finally using technology to further improve safety. Once you spend on a fresh car, you can get advanced safety features including:
Similar to earlier developments like anti-lock brakes, these new features are quickly trickling down from high-end luxury cars to family sedans and even economy brands. It’s too soon to discover them generally in most used vehicles, but you can find affordable new cars with great safety features.
2. Fuel Efficiency Breakthroughs
Federal regulations have average fuel efficiency set to rocket from 27.5 MPG in 2010 to 39 MPG by 2016. While small fuel efficient cars have been on the market for a few years, the mileage ratings of other vehicles – usually more budget-friendly cars – have languished until now. Over the following few years you’ll see minivans, pickup trucks, luxury cars, and even sports cars posting efficiency numbers that were once only located in hybrids and small economy cars.
In the event you put plenty of mileage in your car, you may balance upfront cost of a brand new car with all the long-term savings of a more potent engine (particularly with gas prices rising).
3. Alternative Energy Advances
Though the ethanol boom has faded, other alternative energy trends are here to stay. Pure electric vehicles like the new Nissan Leaf and the Ford Focus Electric promise to dramatically cut energy costs per mile driven. Their equivalent fuel economy ratings are in the triple digits, making a Toyota Prius seem like a gas guzzler. Never to be outdone, GM is already selling the Chevrolet Volt, their plug-in hybrid that will run on either gas or electricity. A plug-in Prius and the Ford C-Max Energi should also hit the market next year.
Don’t forget that electric cars aren’t the only alternative-fuel vehicles. Diesel-engine cars, long popular in Europe, are making a big comeback in America. They offer high mileage, especially on the highway. Honda even sells a methane-powered version from the Civic, which is in high demand in parts of the country where natural gas is cheap.
You can save 1000s of dollars in energy expenses within a few years with one of these new vehicles. Electric cars won’t be around in the second hand car market until a few years from now, and they’re going to be in extremely high-demand, which means their prices will likely be higher than most used cars.
4. Cars for the Long Haul
If you plan to keep a car for a few years and then sell or trade it set for another second hand car, used cars make sense. But if you plan to keep up with maintenance and enjoy the odometer roll way past 100,000 miles, you may not want the uncertain history that accompany a used car. Rather than concern yourself with a previous owner who skipped oil changes or abused an older car, with a new car you know that you’re responsible for gentle driving and regular maintenance. Owning a car for a decade or more will mitigate the initially high taxes and depreciation enough that they may average out to be close to the costs of any used car.
5. Government Incentives
Cash for Clunkers went and came, and traditional hybrids no longer earn green energy tax credits. But you can continue to find lots of government incentives that cut the price of new electric vehicles, plug-in hybrids, and alternative-fuel vehicles. The natural gas-powered Honda Civic GX, for example, comes with a $4,000 tax credit. If you buy a plug-in hybrid or pure electric car, you’ll be entitled to a whopping $7,500 tax credit.
Remember, this is not merely a tax deduction, it’s a tax credit: the same in principle as cash back. Learn more about the differences between a tax credit vs. a tax deduction.
6. Simpler Needs, Simpler Costs
You might be drawn completely to another car by a low advertised price, simply to learn from the vehicle dealership how the base pricing is for a low- or no-frills model. To get the advanced features like cruise control, voice recognition, a navigation system, and seat warmers, you’ll handle a list of expensive options, often adding just as much as $10,000 to your total – before taxes.
When you know that you don’t want pricey options like “pearlescent” paint coating, larger wheels, and even an automatic transmission, you’ll probably find less of a difference between the values of new cars and used cars. You can custom order a brand new car in the dealer without all of the unnecessary options and obtain a competitive price for a brand new car if you’re just looking to get to the office or train station and back.
Anyone that tells you the new car vs. second hand car debate has an absolute winner hasn’t really considered every circumstance.
In the majority of situations, a used car will be the lower-cost, higher-value option. Although with recent advances in government and technology incentives, new cars have enough significant benefits that they’re often worth the extra expense. It’s up to you as being a smart consumer to weigh your needs from the benefits and costs of both new and used cars. Don’t be surprised in the event you occasionally find that the new car represents better value.
Was your latest car get a new or used vehicle? How have you finally choose?