We all love something new, and we love to show it off. When a woman buys a new pair of shoes, we rush to our friends to make sure they’ve seen them, and that we’ve been appropriately complimented both for our fashion savvy, but our eye for a bargain as well. Most of us are the same with a car, especially if we’ve been driving around in a rusted out jalopy for several years. The question is, though, which is better: a brand new car, or a car that is simply new to you?
There are three types of people in the world when it comes to cars. First, there are the people that lease, solely, and won’t consider another option. They see the lease as the best bang for their buck and there is little the average person can do to convince them otherwise. Second, there are the people that buy only brand new cars. They purchase, pay off, and trade for a brand new vehicle. To these people, they are ensuring that they’re not inheriting someone else’s problems and can ensure that everything will be in top working order. Finally, there are the pre-owned purchasers. This type of car-buyer knows what they’re looking for, but they are unwilling to deal with the amount of depreciation that happens with a new car.
Whatever category you fall into; dealerships want your business. When it comes to the lessee, they know you’ll maintain your vehicle, and typically within the dealership. The new car guarantees that a car will be gone from the lot, and the salesman will be one step closer to the monthly quota. Sale of a pre-owned car means that the dealership isn’t going to have to take a loss by sending it off to auction if it sits for too long, they’re clearing out their inventory, and they have the option of charging you for an additional warranty. Which route offers the best value?
Any way you slice it, it’s going to come down to preference. Each type of car buyer offers a different valid opinion that has some truth to it. However, whose opinion is more accurate? Are new car buyers really guaranteeing themselves a vehicle that isn’t rife with issues caused by a previous owner? Are pre-owned cars really a better deal because they’ve already completed their biggest loss? Certainly, leasing is an option, and a good one for many people, but most lessees are guaranteed the same value. Which type of purchase is the better value?
With a brand new car, certainly, you’re guaranteeing that you’re the only person that will drive that car for serious distances, and this has a certain panache. You don’t have to worry that the previous owner drove the car like Andretti, or that a second-rate mechanic made shoddy repairs. However, a new car does not guarantee a risk-free purchase. There is less risk, that’s obvious, but there is no such thing as the perfect car. Even new cars can have defects, and things that will go wrong, and sometimes these defects happen right off the lot.
A pre-owned doesn’t mean that you’ve put yourself at serious risk, that’s a common error. You should be attentive about the dealership from which you’ve purchased the vehicle, but that’s just common sense. Many dealerships offer certification of their pre-owned vehicles. Sometimes, they’ll do it on their own accord, and sometimes it may be something you have to request. This basically means that they’ll put the car through some pretty rigorous inspections to ensure that they’re not selling you a bucket of junk. Not as safe as a brand new car, but pretty good.
As for depreciation, there is a figure that gets thrown out quite a bit during discussions. That figure is that a car loses fifty per cent of its value as soon as it is driven off the lot. This is a drastically inflated number. While a brand new car will lose some of its value when you take it home, it is not fifty percent. Depreciation is dependent upon how well the car is maintained, its accident and service history, and more importantly, the mileage and condition of the car. Sure, the brand is going to have a great deal to do with the equation as well, but you’d be surprised what some cars are worth at trade-in time. For those who are dedicated to brand new cars, rest assured, your car is going to retain some of its value if you take good care of it. For pre-owned buyers, the car will continue to lose value, but it will be much more gradual than that of a brand new vehicle.
There are no hard and fast rules in the auto industry, as we rely heavily on what the customer wants, and those wants change. However, one rule that does ring true is that there is a market for every buyer. Whether you want something brand new, or something pre-owned, there’s plenty of inventory available. What you want from your next vehicle is all a matter of preference, so simply pick your poison.