Should I Buy a New or Used Car?
Deciding between a used and new car can make a big difference in how much you pay for transportation over the next few years. For many people, the options are limited by their financial situation.
Why buy a new car?
While owning a new car may seem like a luxury for a college student, there are many practical reasons to choose a new car over a used car. If your credit score is in good shape, you may be eligible for a variety of dealer incentives that reduce the price of the vehicle. You also may be able to get a 0-percent interest car loan, reducing the total amount of money you’ll pay for the car by thousands of dollars.
Owning a brand-new car means you’ll have access to the newest safety features and technology. If you aren’t able to perform simple repairs and maintenance on your own, you’ll enjoy the reliability and bumper-to-bumper factory warranty that comes with owning a new vehicle.
If you decide to buy a new car, choose a model that has a reputation for holding its value. You’ll experience a sharp decline in value the minute you drive a new car off of the lot as its owner. If you plan to drive the car for at least five years, you can better justify the investment.
Why buy a used car?
If you choose a used car, you may pay less for insurance. Depending on whether you finance the vehicle or pay cash, you’ll have more choices for coverage amounts if you don’t have to heed the wishes of a bank or finance company.
Your original purchase price will be less if you choose a used car. The cost to register an older vehicle is lower, as well. This can save you hundreds of dollars each year, depending on your state of residence.
If you have a limited budget, you’ll find that you can purchase a nicer car with luxury features for the same amount of money as a base model new vehicle. Used cars may cost 30 percent less than new cars when they are just two or three years old.
When shopping for used cars, be sure to ask to see a vehicle history report. You should know ahead of time if the car has a salvage title, has been in an accident, or has been in a flood.
To fully understand how depreciation affects the value of the car you choose, use a car loan calculator to compare the cost of a used car to a new car. You may find that purchasing a vehicle that’s a couple of years old isn’t the much less expensive than buying a new one.
When making a decision between buying a new car and buying a used car, remember to take repair and maintenance costs into consideration. Understand what your vehicle’s warranty (if any) covers and what it does not.
If you decide to purchase a used car, in addition to your monthly car payment, set aside some additional money each month to cover expenses like new tires and unscheduled repairs.
For more information about how Boro can help you get financing for a new or used vehicle, even if you are a college student, go ahead and contact us.
About Boro
Boro is the leading platform for college students to get the auto loans, leases, and personal loans they deserve — all while helping to build credit. We are committed to providing affordable and convenient financing solutions to those who are denied credit by traditional lenders. By leveraging alternative data and machine learning techniques, we are revolutionizing the consumer financing industry.
We started our journey as an auto lending platform for international students in 2015. After talking with our customers, we realized that domestic students, young professionals, and new immigrants could all benefit from our products. So, we evolved into a data-driven consumer lending platform providing auto loans, personal loans, and auto leases for anyone without enough credit history to borrow from traditional lenders.
