SHOP FOR A NEW CAR
Are there many pros and cons to buying a new car vs. used cars? When you shop for a car, the newness always seems to grab your attention quickly. The shiny paint, the beautiful seats, and the accessories are the most attention-grabbing.
Before you start to shop for a new car, it is important to do research and ask questions like, “when buying a new car what are the fees” because there are many hidden costs. Another high-cost item, in new cars with the “push to start” is replacement keys, so ask, “what does it cost to get a new car key made?” know this so you have no hidden surprises.
Below, I attempt to outline some of the most important factors to consider before you decide which car is best for you. There are many factors that make a new car or a used car a good purchase.
The least favorable for a new car is the price. They all seem so over-priced. Used cars come in many types, and you must know all of them in order to get a safe and affordable used car.
NEW-CAR DEPRECIATION
Depreciation is the value cars lose after you drive them off the lot, different cars depreciate at different rates over a 5-year period. Some cars have a high depreciation rate, and some have a low depreciation.
Potential new car buyers should research the depreciation schedule of the car that interests them before they buy.
A buyer will not be harmed with high appreciation if the car is driven for several years. On the other hand, a car with high appreciation can lose value quickly and money will be lost if it is sold after one or two years. The best cars to buy for resale value are cars with low appreciation.
In the past, if a new car was in an accident you could lose money due to the difference in what you owe versus the depreciated value, this happens if you don’t put down a large down payment.
Now, there is something called gap insurance, that can be purchased when when a new car is bought and put a low-or-no down payment. Gap insurance doesn’t always work, but it sometimes helps.
Search the car analysis websites to find the depreciation schedule of various makes and models of cars. The site shows both new and used car depreciation.
According to Edmunds, one of the many car analysis websites, on average a new car loses 11% of its value the minute you drive it off the lot.
During the first 5 years, the average car depreciates by 15%-25%. After five years the average car is worth 37% of what you paid for it at the dealership.
If a car is purchased that is over 3 years old, depreciation has set in and the buyer could get the purchase value if the car if sold.
The advantage of buying a used car that is 3-4 years old, is that the car is usually in good shape and most of the depreciation is over.
WHEN BUYING A NEW CAR WHAT ARE THE FEES
When buying a new car, what are the fees? is the first question that should be asked. The fees are the extra hidden cost of a new car purchase. These are the registration fees, the sales tax, and the documentation fee.
Most buyers don’t think of this until the sale is done and it is on paper. The fees on a used car are much less, due to the aging of the car. There are considerable savings with these fees.
THE MOST EXPENSIVE WAY TO BUY
A new car is the most expensive way to buy a car when you consider the price of the car is at the top, and you must pay new car warranty service.
Insurance on new cars is the most expensive due to the loan value and replacement cost, and car registration or taxes are at their highest.
FIRST-YEAR WARRANTY SERVICE
New cars have a warranty for the first year, and most have additional warranties for major items that go on for 5 to 10 years. To keep a first-year warranty active, there must be get warranty inspections, usually about every 3 – 6 months.
Maintenance schedules vary according to to make, model, and car manufacturer, the dealer will specify the maintenance schedule.
A major area many inexperienced new car buyers forget to include in their budget is the cost of the new car warranty service.
Get this information from the car dealer, before you decide on your car. Some new cars have a hefty new car warranty service.
Find out what the new car service cost before purchasing a new car. It is required to keep a first-year warranty in effect.
RECALLS OR LEMONS
There are those who think if they buy a new car, they will have the perfect car with no problems. That is not true. Pay attention to the recalls on new or near new cars.
The recall schedule is available for every car sold. One person, I talk to about car recalls told me he was forced to park his near-new car because he kept getting recall notices.
He got a total of 37 recalls by the time I talked to him and simply did not have the time to take the car to the dealer at that time.
If these recall issues are not resolved, it can cost thousands of dollars in repairs down the line if the car is passed on to someone who does not check for the recalls.
It may also make the car unsafe to drive if the recalls are not addressed.
LOW MAINTENANCE VERSUS HIGH MAINTENANCE CARS
Low-maintenance cars have two advantages. One, they don’t take a lot of time in servicing. Two, they don’t take a lot of money. Constant unexpected major car repairs are a large part of budget-busting.
The car maintenance history is available on cars at all the car analysis sites. New cars with a high maintenance schedule should be avoided, this is another hidden cost.
During the car note period and after the warranty period, a high car maintenance bill could cause a car owner to park the car it until there is maintenance money.
A low-maintenance car is a more affordable option. Some cars have a high repair rate as near new cars and some have low repair rates as used cars.
If an owner maintains a regular maintenance schedule, with regular oil changes and tune-ups, the car will be checked frequently and well-maintained. Regular maintenance will catch problems early, and keep costs low.
A HIDDEN EXPENSE IS TO GET A NEW CAR KEY MADE
New cars now are made with a click to get in a car, a click to secure it, and a button to start it. The expense to get a new car key made is usually not a major thought with purchase. They have to be specially made, mostly at the dealer. These key fogs can be as much as $500.
On the other hand, a used car that doesn’t have all the trappings of the newer car key fogs can be created for as little as $95, with a basic car without a chip.
The price of the key fog depends on the complexity of the chip. The push to start cars, or the newest cars, have the most expensive key fogs. Understanding what it takes to get a new car key made, if you lose your keys, is crucial.
Long Term Performance
Some cars last for several years without major problems some only last a few years. Check out the long-term performance of a car to see if it is a high-maintenance car that requires a lot of repairs as a used car.
When buyers shop for a new car, the long-term performance should be in the research. Some cars do very well to 300,000 miles while others have engines that drop out at 80,000 miles.
The long-term performance of a new car is a consideration. If the cost to purchase is high and the cost of maintenance for performance is high the car cost can drain a budget. So, even something as small as getting a new car key made to oil changes and tune-ups should be well-researched before a purchase.
NEW CAR RESEARCH BEFORE YOU SHOP FOR A CAR
There are websites all over the internet where you can research new cars for cost, depreciation, new car repairs, warranty cost, and just about anything else you need to know. When buying a new car find out first, what are the fees, before approaching a dealer.
The following comes to mind – Edmunds, consumer reports, Carfax, Kelly blue book (kbb), and many more. The important thing is that you do your research before you buy the car. Research can also be done on quality used cars, including new used cars, and older used cars.
SUMMARY OF; IS THERE MORE JOY IN NEGOTIATING BUYING A NEW CAR VS. USED CARS? WHEN YOU SHOP FOR A NEW CAR
There are pros and cons to buying both a new car and a used car. Both of course have hidden costs. But, because of the high cost of a new car, the hidden fees can be outrageous when you shop for a new car.
The minimum questions that should be asked befor a new car is purchased is: when buying a new car what are the fees? these are the hidden cost. Another question is; what does it cost to get a new car key made? this can be a large surprise cost if you lose your keys.
Some cars have a high depreciation, know your schedule before purchase. The first-year warranty service on some new cars is very high-priced, used cars don’t have this high-priced service. Look up the recall history of a used car before purchase. There are millions of used cars on the road with no recalls done. Some cars have a very high maintenance record as new cars and used cars, some are low, these records can be found in research at Edmunds or Carfax.
Lois Center-Shabazz | Course Delta Agency
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