NEW CARS AND TRUCKS
If you are considering buying a NEW car, you are not alone. Most consumers in the market for a vehicle today give serious consideration to whether or not a new car should be their next car. And why not, there are lots of solid reasons to choose to buy new:
PROS of Buying a New Car
Pride ~ A new car or truck just has a way of making you feel good. Watching your reflection in store windows as you drive by. Looking out in the driveway just to get a glimpse of your new ride. Posting pictures of you and your new vehicle on Facebook so all your friends and family can see it. It's a one-of-a-kind experience, especially if it's your first time.
Improvements ~ New vehicles feature the newest technologies and advancements. They also meet all the current government and manufacturer standards and specifications.
Reduced Maintenance ~ A new vehicle won't need any major maintenance for the first several thousand miles, and then for the most part only an oil change and tire rotation. Some manufacturers even cover the cost of those routine maintenance items. The new vehicle likely won't need new tires, a battery, muffler or brakes during the first few years of ownership or longer.
Warranty Coverage ~ The manufacturer covers its new vehicles under warranty, typically for at least 3 years/36,000 miles, and many warranties last even longer. Under warranty, if something goes wrong it's the responsibility of the dealer and manufacturer to repair it.
Peace of Mind ~ If you encounter problems with your new car, you have legal recourse through state lemon laws in all 50 states. Prove that your new car is a "lemon" and you could receive a replacement vehicle or a refund of the purchase price. These laws apply only to new cars. You also can find out if your vehicle was returned to the used-car market as a lemon by looking at the vehicle's title and using a vehicle history service like Carfax.com or AutoCheck.com.
Roadside Assistance ~ In addition to a comprehensive manufacturer's warranty, almost all major brand new cars and light trucks come with free roadside assistance. Some automakers reimburse you or provide a loaner car / rental car if warranted repairs will take several days to complete or if you are broken down far from home.
Safety ~ New cars also tend to have the most up-to-date safety equipment and better safety records. As new government safety standards are enacted frequently, owning a new car or truck is the only way to know you are driving one of the safest vehicles available today. As safety testing reviews and results have become more readily available in recent years, there is a stronger emphasis on vehicle safety among consumers.
Rebates ~ Manufacturers routinely offer special rebates on select vehicles in their line to entice consumers to purchase new cars. These rebates usually range from $500 to $5,000, and can be used in lieu of a cash down payment in most instances, limiting or eliminating any out-of-pocket expenses associated with purchasing a new vehicle. For Bad Credit consumers, or people with negative equity in their trade-in, rebates can help reduce the amount financed and make vehicle ownership possible.
Lower Interest Rates ~ Auto loan interest rates are normally lower when you buy a new car than when you buy a used car. This is normally a difference of 1% to 3%. For Bad Credit buyers, a few percentage points in interest rate can be the difference between being able to afford a monthly payment or not.
Special Financing Rates ~ If you have excellent credit, you may be able to qualify for a special reduced rate auto loan offer from the manufacturer, dealership or lender - usually 0%, .9%, 1.9% or 2.9% rates. These special rate offers are only valid on new cars and can save you thousands of dollars. Free and cheap money!
Leasing Options ~ Leasing is usually reserved for people with good or excellent credit, and only available on new vehicles. Leasing is a great option for people that like to trade-in or drive a different, newer vehicle every 3 years or so. The advantages of leasing are a lower monthly payment, lower initial investment (in some cases), and you can get more car for your money.
CONS of Buying a New Car
Depreciation ~ New cars depreciate in value significantly, losing about 30%-40% of their value within the first 2-3 years of ownership. After five years, your new car may lose as much as 70% of its original value.
Negative Equity ~ If your new car is financed with an auto loan, the rapid rate of depreciation means that you will be upside down (you owe more than the car is worth). You will have more negative equity for a longer period of time with a new car than if you purchase a used car.
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