Which Car is Right for Me? Whether you want a small car or a big car it all depends on your current lifestyle. If you have a big family, then you need a car that’s spacious, has excellent safety features, and a low gas consumption rate. A college kid wants something that’s flashy, loud, and goes 0-100 MPH in less than five seconds.
Is money the only determinant when it comes to the question, What type of car should I buy? Well, there are other important factors explained below.
Factors that determine whether you should buy a new or used car
1.Your current employment status
After thinking about the car’s price tag, you also think about fuel consumption and maintenance. However, the most important is your overall financial health. Before buying a car, you need a decent gross pay that leaves you with enough net income after paying your loans, mortgages, and utilities.
If you have a permanent job or run a thriving business, your income allows you to own a new car. Why? Because you have a guaranteed source of monthly income that’s enough to satisfy both your personal and car needs. People who have temporary sources of income can run into financial difficulties whenever their contracts expire.
2. Your credit score
Creditors determine whether you qualify for either a brand new or used car based on your credit score. Your credit score also determines your auto loan’s APR. Car buyers with a credit score above 719 don’t need cosigners when applying for car loans.
When your credit score is below 500, creditors will limit your choices to used-cars. Purchasing a second-hand car is risky because you never know what mechanical problems lie ahead. Bad credit car loans also have high APRs. Plus, you need a cosigner and pay a huge cash deposit to secure car financing.
3. Nature of your job
Some professions involve frequent traveling to different cities or continents. For example, flying doctors move around different continents frequently. USAID also posts it’s employees to different corners of the globe on a frequent basis. If this describes your current employment situation, you need a used car for two reasons.
In most cases, you’ll only work in your current station for two years. After your project’s completion, the employer reassigns you to a different country. Since two years isn’t such a long period, you can get to work comfortably driving a used car. Especially if you’re working in a modern city.
Second, you can easily sell off your second-hand car once your term expires. Since you bought it at a low price, it will take less time to find a willing buyer who wants it at a more affordable price.
4. Nature of your business
Agribusiness requires you to do frequent customer deliveries. After harvesting your crops, you need to transport them from the farm to various customers. Sometimes, it rains so bad that navigation becomes a huge challenge.
In order to beat the frequent heavy rain and long muddy roads, you need a high-performance 4X4 truck. Your best bet is purchasing a brand new 4X4 truck because a new engine outperforms an aged one.
5. Experience with cars
Some parents buy used cars for their kids when they receive college admission. This has several advantages. It’s affordable and enables the new owner to enhance their driving experience and basic car maintenance. Plus, you pay low insurance premium rates and spend less on gas compared to owning a brand new car.
If you’re planning to surprise your spouse with an amazing 5th wedding anniversary gift, purchase a brand new car.
6. Likelihood of upgrading
Personal financial coaches recommend minimizing expenditure where necessary. If you want to buy a new car, you can minimize your expenses by trading-in your current car. You’ll probably save 30-40% if your car is in excellent condition.
If you’re planning to do a trade-in after two years or less, it’s advisable to purchase a brand new car. You’ve heard about car depreciation but new cars depreciate at a lower rate than used ones. Owning a new car gives you more bargaining power than trading in a used motor vehicle. Good bargaining power enables you to get the car you want rather than settling for a lesser one.
Three Big advantages of buying a brand new car
1. No wear and tear
Buying a brand new car means that you’re the first ever owner of that particular unit. No one in the entire world or your country has ever put mileage on the car. So, you’re assured of excellent engine performance, low fuel consumption, and a very clean interior.
2. High level of reliability
A used vehicle requires rigorous servicing after driving it for 5,000-6,000 miles. However, you can drive a brand new car for at least 12,000 miles before taking it for servicing. A new car has excellent engine parts that move in excellent precision. On the other hand, a used-car’s engine performs at a significantly lower efficiency level due to wear and tear.
3. Easy to trade-in
Car dealerships prefer new cars because the engine and body are in excellent condition. That’s why car dealerships only accept new cars that are less than five years old. If your car meets these requirements, you’ll get the car you’ve been eyeing. This enables you to have enough money left over to buy high-quality car accessories.
Three Big advantages of buying a used car
1. Affordable buying price
A used-car costs 40-50 % less the value of a brand new car. This makes it so affordable that you really don’t need a car financing loan. At such a low buying price, you’ll have enough money to pay off your monthly insurance premiums without breaking a sweat.
2. Low insurance premiums
Motor insurance companies determine your monthly premiums based on your car’s value. A low buying price translates to very affordable monthly premiums. You probably won’t need to get a second job in order to pay your insurance premiums on time.
3. Suitable for short distances
If you need a car to transport you from home to school and work within short distances, buying a used car isn’t such a bad idea. You won’t have to worry about servicing your car if you cover less than 500 miles each month.
What kind of car should I buy?
It all depends on the answers to the five important factors shared in this post. However, the biggest factor is whether the car offers in front of you actually provide value for money.
Complete Auto Loans is ready to help you find auto loans for both brand new and used cars.