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. Replacement keys for “push to start” cars are very expensive.
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.
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.
After using a car for several years, a buyer will not have problems with appreciation values due to time. However, a vehicle with high appreciation can lose appreciation quickly; you will lose money 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.
A buyer can purchase gap insurance when a car is more expensive than the cost. So, when you buy a car with a low or no down payment, there could be problems. For example, there may be a gap between the balance owed and the vehicle’s book value. 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.
WHEN BUYING A NEW CAR WHAT ARE THE FEES
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.
Depreciation usually sets in after three years. This means the buyer could get the purchase value if the car when it is 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
The first question you should ask when buying a new car is “what are the fees?” These are the registration fees, the sales tax, and the documentation fee. These fees are also known as hidden costs. 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 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 costs before purchasing a new car. Because this service is required to maintain a new car’s first-year warranty.
RECALLS OR LEMONS
Some buyers 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.
It is a good idea to research a car’s recall schedule. Due to the excessive number of recalls, one car owner told me he had to garage his car. But unfortunately, he ran out of time to complete all the work.
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.
Recalls must be addressed to avoid driving a dangerous car that may need costly repairs in the future.
LOW MAINTENANCE VERSUS HIGH MAINTENANCE CARS
Low-maintenance cars have two advantages. One, they don’t take a lot of time in service. 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. Another hidden cost is the high first-year maintenance service of some new cars.
During the car note period and after the warranty period, a high car maintenance bill could cause a car owner to park the car 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 are now made with a click to get in a car, a click to secure it, and a button to start it. The expense of getting a new car key made is usually not a significant thought with purchase. These keys have to be specially made at the dealer usually. 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 most vehicles 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, this includes 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 before a new car is purchased are: 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? This cost can be substantial 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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