Do you have to buy a new car?
The answer to this question may be yes, but it’s likely no. There are lots of options these days. New to you is still new. This could mean a new car, a used car, a certified pre-owned car, or a new car lease. We all want to get a good deal on our next car. More important, we want to get the best value for our money. Ben Franklin once said “A penny saved is a penny earned.” That mantra is especially true in car shopping.
So, what brand of new car is “new” to you? Buying a used car is almost always a good financial move. All cars are depreciating assets, but a new car is a hyper depreciating asset. Its value falls far and fast in the first year, so buying a late model used car could be a great financial move.
An alternative to the traditional used car is a certified pre-owned car. This car comes with an extended warranty backed by the manufacturer and typically goes through a detailed inspection process. It’s as close to new as a used car can get. However, the piece of mind that comes from that inspection and warranty comes with a price premium. The certified pre-owned will cost you a bit more than your traditional used car.
New Car Lease:
A new car lease is also an alternative, but you have to make sure you understand what leasing means. A lease is a great option for someone that doesn’t put a lot of miles on their car. It’s also good for someone that likes driving a new car every couple of years, or can get tax benefits from leasing. A lease is not for you if you are a road warrior, don’t enjoy any tax benefits from your car, or you like the idea of eventually not having a car payment.
At the end of the day you are buying a car to solve a transportation need. Your first goal has to be to make sure that you fill that need first, and then find the right used or new car. Either choice is a good option. Buying a car these days is not one size fits all. In fact, some could say its one size fits few. Good luck finding the size that fits you.