Auto Financing Information in the Topeka Kansas Area
What You Should Know About Buying a New Car
If you’re in the process of purchasing a car, you might be asking yourself if it’s better to buy a new or used car. When it comes down to making financial decisions, it’s safer to think logically and run the numbers before signing the dotted line. This article will explain what you should know about buying a used car, but let’s start with the basics.
New or Used?
Buying a new car is good because it has not been exposed to wear and tear or to any accidents, but if you have patience and look for a good used car, then you will come out winning. For example, on average a used car will lose about 20 percent of its value during the first year. The best part of buying a used car is that you will be buying it “after the dip” as they call it, which means that you will get the highest return on your investment. The main factors affecting the value of a car are depreciation, the wear and tear, and previous maintenance. If you keep these three items in mind, then you will be focused on looking for a car that is well known for not depreciating as much, that is in good condition (no previous accidents), and that the previous owner has kept the manufacturer’s maintenance schedule. For example, some cars that are famous for maintaining a high resale value:
* Honda Civics - Civics are known for lasting many years and being affordable to repair. Look at any reseller lot, and you will most likely find a few civics.
* Toyota Corolla- Corollas are, just like civics, great for maintaining their value.
* Toyota Camry - Another Toyota makes a list and that is because Toyotas are known for their reliability and extremely easy to find mechanics that work on them.
* BMW M3 - As far as luxury vehicles are concerned, the BMW M3 makes a list because it’s a highly valued car by anybody looking for a luxury vehicle.
* Lexus IS 350 - Yes, Lexus is the luxury vehicle division of Toyota which explains why they’re so reliable and suffer little from depreciation. Parts and maintenance are a bit more expensive on a Lexus than a Toyota, but that is because it’s considered a luxury sedan.
Yes, everybody has heard about how just one minute after you drive off the dealership your car loses between 15-20% of its value. But depreciation doesn’t stop there. Cars have lifecycles, and it is said that three years after the initial purchase of a vehicle is the sweet spot for getting the best bang for your buck. Understanding depreciation is key especially if you intend to trade in your car because this will determine how your car is valued.
Advantages of Buying a Used Car
1. Better lifetime value - When you purchase a used car you will avoid taking the initial depreciation hit and will be able to buy low and sell high.
2. Dependability - When you purchase a used car and do the research as to its maintenance history and accident reports, then you will be looking specifically for a vehicle that has been well kept and proven dependability,
3. Lower insurance costs - This is relatively simple, if a car is worthless, then it will cost less to insure. Again, you’re getting the best lifetime value deal.
Disadvantages of Buying a Used Car
1. New cars are easier to finance - New cars are typically easier to find financing for because they’re considered a safer investment by traditional financing sources such as banks or credit unions.
2. Advanced technology - If you are a techie then the newer cars will always appeal to you, but always keep in mind that technology doesn’t change that much in 2 years.
3. Warranty - Many used cars come with a limited warranty, but new cars come with full warranty.
How to Protect Yourself When Buying Used
When buying a used car, it is essential that you do your homework and get the full story behind the car that you are purchasing. For example, you should make sure the car has a clean title. When it comes to verifying a clean title you can use resources such as Carfax and Autocheck. You can use these same resources to check the repair and maintenance history.
Also, it is highly recommended to have a mechanic look at the car before purchasing as this can save you a lot of headaches and money. By having a mechanic check the car after checking its maintenance history, then you should be on the clear and feel confident about your purchase.
Another essential part of protecting yourself is to shop around town, so you have an accurate picture of current prices and what is a good deal at the time. Shopping around will also find out about the different financing options that the local dealerships provide and which ones offer in-house financing.
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