New cars depreciate — or lose value — at a rapid rate, potentially up to 20% in the first year alone, so it’s no wonder that opting for a used vehicle may seem like the budget-friendly choice. But there are a number of great reasons to consider buying new, including access to the best safety features, dealer incentives and a more comfortable and entertaining ride for your passengers.
Though buying used has a few advantages, here are six reasons to consider opting for a brand-new vehicle.
Used vehicles have a prior owner, or even multiple owners. Along with past drivers can come a history of maintenance and service neglect or even car accidents. A new car has no prior history, so you don’t have to worry about getting a lemon.
2. Warranty coverage
If anything goes wrong with a new vehicle, you’ll likely have the peace of mind that comes from a car warranty. Most new vehicles come with multiple warranties, but the standard typically includes coverage for certain repairs for a period of up to three years or 36,000 miles, whichever comes first.
Certain manufacturers, including Kia and Hyundai, may offer warranties for even longer periods or include extra coverage for new vehicles through a maintenance plan that’s included in the purchase price of the vehicle.
3. Fuel efficiency
Buying new can mean gaining access to the best fuel efficiency technology available. Cars with better fuel economy are not only better for the environment but can save some drivers an estimated $1,000 or more per year on gas. The U.S. Department of Energy’s fuel economy guide can help you find the most fuel efficient cars by make, model and class.
4. Tax credit
If you buy a qualifying electric or plug-in hybrid vehicle in 2021 or 2022, you may be eligible for a federal income tax credit of up to $7,500. You can see a list of qualified vehicles and tax credits here. Note that once a manufacturer sells 200,000 qualifying vehicles, the federal tax credit begins to phase out.
5. Financing deals
It’s generally recommended that borrowers go through their bank or credit union for an auto loan, but car buyers with good credit may qualify for exceptional dealer financing on brand-new vehicles. Certain manufacturers offer competitive loan terms, including 0% APR. Paying zero interest could potentially save you thousands of dollars on your loan repayment.
Factory discounts could add to your cost savings as well. Before buying, check to see what rebates and incentives, like “dealer cash,” might apply to new vehicles being sold in your area.
6. Safety features
Vehicle technology is evolving quickly, including safety technology. Buying a new car means you’re more likely to benefit from newer, possibly life-saving systems, even if you buy the standard trim. Before you visit a dealership, check out the 2021 top safety picks from the Insurance Institute for Highway Safety (IIHS).
Other things to consider when buying new
The purchase price of a car isn’t the only expense to consider. Before you start shopping, ask yourself these questions related to the overall cost of buying and owning a new vehicle.
Will my insurance be more expensive for a new car?
Cars that are more valuable are generally more expensive to insure, but insurance costs vary significantly between similar cars. If you want to know how much your premium might be, contact your insurer for rate quotes on the makes and models you’re interested in buying.
Are new cars more expensive to repair?
Repair expenses vary a lot across make, model and even year. Generally, newer cars need less frequent repairs, but those repairs can get pricey, especially if it’s a luxury car or the warranties have expired.
How can I get the best trade-in price?
You may not have to trade in your car in order to buy a new vehicle, but if you do, make sure to recover as much value as possible. You can use free tools to appraise your car’s value and negotiate a fair price with the dealer.
Will bad credit prevent me from buying a new car?
Having bad credit doesn’t mean you can’t get approved for a car loan, but it might mean paying a higher cost to borrow. Rather than applying for financing at the dealership, consider going through a bank or credit union to find the best auto loans for which you qualify.
- This is the most dangerous state for winter driving (hint: it’s not Alaska)
- How much does auto insurance go up after an accident?
This article was produced and syndicated by MediaFeed.org.