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Used vs New Cars

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The Age-Old Debate

The answer to this question changes depending on your financial situation and your long term goals. Each type of vehicle has advantages as well as disadvantages and we will explore a few here.

Used Car Advantage

There are several advantages to purchasing a quality used car:

Price Negotiation

One of the best things about buying a used car is that you can negotiate. New car prices in Barbados are almost always set in stone and this is aided by the fact that the dealer is probably controlling the finance package anyway. In contrast, used car sellers are forced to haggle to get a sale. Remember, they know you can go to a new car dealer with only the deposit and get a brand new car! This is a definite advantage. Depending on your skill you can come away with a pretty good deal. Up

Retention of Market Value

Do you know that you can buy a used car right now, let's say, and resell it in six months time at the original purchase price or even more (especially if you read the preceding section on price negotiation). Try doing that with a new car. One of the biggest disadvantages of purchasing a new vehicle is the fact that your car loses as much as 15~20% in value as you drive off the dealer's lot. You're going to take a hit if you try to sell your still relatively new vehicle within the first two years simply because it's easier for prospective purchasers to get a new one. This massive first year depreciation is already built into the used car's price, so no worries there. Smart buyers might look for a six month to one year old car in order to benefit from the marked-down price and the fact that they may be able to benefit from the remaining warranty period on the vehicle.  Up

Maintenance Flexibility

Purchasers of used cars have much more control over the maintencance of their vehicles and this can save thousands of dollars over time. New car purchasers are normally locked into maintenance agreements with the dealer in order to maintain warranty eligibility. This means regular service appointments which the consumer pays for at the dealer rate. Remember, your new car warranty may be voided if the vehicle is not serviced according to the manufacturer's schedule. This can turn out to be expensive over time, and chances are that your new car may not use the warranty option at all, since it doesn't usually cover everything over the life of the contract. Used car owners can shop around for the best deals on parts and service and still enjoy trouble-free motoring without paying through their teeth. Up

Lower Insurance Premiums

Insurance premiums for used vehicles are lower than those for their new counterparts because of the difference in value. The "free" insurance on your new car isn't really free, it's been cleverly packaged into the price of the vehicle, so you are paying for it. Smart people drive used cars until their no-claims discount maxes out before buying a new one in order to save on the insurance premium. Up

Auto Parts Availabilty

As vehicles age, parts suppliers start to stock spare components in anticipation of a rise in demand for mechanical as well as body parts. This gives used car owners some degree of choice about where to shop, with competition hopefully keeping prices down. In contrast, parts for new models are almost always only available from the dealers, who don't usually carry large parts inventories for these vehicles in the initial stages. Up

A quality pre-owned or used vehicle can provide years of reliable service to its owner simillar to what is expected from a new vehicle but for a whole lot less.

Part 2a: New vs Used Cars      Part 3: Loan Payment Calculator      More Articles
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