When asked whether you should spend on a new car, most personal finance pundits will steer you and their clients in the direction of a used one. According to them, a used car wouldn’t just cost less. The purchase also seems more sensible in the light of the high premiums you’d have to pay for a brand-new car! Then there are other claims like the quick depreciation of new cars in the first two years. In short, they would deem buying a used car more cost-effective.
Does that mean you will have to give up on your dreams of owning your dream car? No, it only means that you need a second opinion…an expert one!
Below we present some pointers that can make all the difference when you are out shopping for a new car:
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New cars don’t always cost more
It is myth-busting time! New cars don’t always cost more. Yes, used cars are a good alternative in many cases, but you can’t apply the rule mentioned above to all used or new cars. When you are comparing how much a used car will cost you, don’t forget to factor in the cost of maintenance. A new car wouldn’t need little maintenance for several years if any. Moreover, the insurance rates for a new car are lower as compared to those for a used car. Add the difference from each month, and you will begin to see real savings over a few years.
Buy the model that won’t lose its value fast
An expert would tell you there is a way around the fact that new cars depreciate quickly in the first two years. Yes, you should give key consideration to this factor, but do so by choosing a model wisely. Some models will shed their value much quicker than others will. So, instead of splurging on a car just because it looks good or functions like a dream, check out its resale value. That way, you won’t get much less when you sell it later. How can you find out this information? Use the handy calculator at What Car? to calculate car depreciation. It doesn’t just tell you the annual depreciation rate, but also how much value it will hold on later.
Enjoy the latest in technology
Other reasons make buying a new car a cost-effective decision. For instance, the newer models will come equipped with the latest technology that the automobile industry has to offer. Electric cars will ensure lower emissions and better yet, give you good gas mileage. Not only will you be protecting the environment, but you will also not be spending on fuel! A hybrid car can also save you fuel money. Consider these plus points before you make a purchase.
Fund your car purchase in cheaper ways
This car costs calculator will help you work out how much your new car will really cost you. An expert would recommend that if you have the money, then you should fund the purchase in cash – whether completely or partially. Any loans that you take out would have interest tacked on to them, which will up the actual cost of the purchase.
If you don’t have the savings to pay for the car in full via cash, do the next best thing. Put a huge deposit down and pay the rest on a monthly basis. When that isn’t possible either, use your credit card for the purchase. In that way, you can benefit from the protection offered by a credit card purchase. Even if your credit company adds £100 to the total cost of the vehicle, you will enjoy a joint liability with them. If anything happens to it – and you have paid that month’s bill in full – the credit company will come to your aid!
Find out about the other ways you can finance the purchase.
Buy your new car when it is the best time to be buying one
Did you know there is a sweet spot or what is considered the best time to buy a car? Experts will tell you doing this could save you thousands of pounds. There are several things of note in this regard though. For instance, you’d get a better deal in the winter on convertibles. That’s because most people will buy one in the summers. The reverse is true for four-wheel-drives. Poorer weather and slippery roads make them a popular purchase in the autumns and winters. So, buy one in the summer when chances of getting a bigger discount are greater.
Similarly, by the end of each quarter, a car dealer would be much more agreeable and offer you better deals. That is when they must complete their sales targets for the quarter. So, go shopping at the end of December or June!
Be smart if you must buy a used car
Say, you have exhausted every option you had, and a used car is what you can afford at the moment. Start by doing some research for a smart purchase. When you have narrowed down your choices, look up the vehicle’s year and model. Then match those with the price that the car dealer is offering. Only proceed if you think it is fair.
Next, look into the history of the particular vehicle you are about to buy. You can do that by studying its history report. It will tell you how many times it has been repaired, the accident
Other sites offer this information as well. Check which one’s charge for it and which don’t. If you can afford it, the paid report will give you a comprehensive look at the vehicle in question. Otherwise, you can rely on the free ones to detect any major red flags. The idea is to know the kind of maintenance the car might require. A good deal wouldn’t mean much in the long run, if the maintenance bills keep on piling each month!
As evident, buying the right new car at the right time for the right price is a science. This is where expert opinion can make all the difference for you!