Buying a car is a big purchase and a significant investment in your life. It isn’t a decision that should be taken lightly or made quickly without properly researching and understanding every aspect of your new vehicle.
There are a lot of questions to consider before deciding on the car that’s right for you. How will you pay for it? Should you buy a brand new car or a used car? What does the warranty cover and what happens when it ends? What car insurance should you be looking for? There are no simple answers, but here’s a good starting point to help you navigate the complex process of buying a new car.
How to finance it
First and foremost, it’s essential to know how you will be paying for your car. Are you using your savings to pay for it in full or perhaps put down a deposit? Will you trade in your old car to pay a portion towards the new car? Will you need to look into other options such as financing through a bank? Take a good look at your choices and then set a budget and stick to it.
The pros and cons of new versus used
Buying a brand new car is luxurious but not always a smart choice. You may have more freedom of choice, more modern specs and technology, and a comprehensive manufacturer’s warranty for the first few years, but one of the biggest downsides is the depreciation of a brand new car. Most cars depreciate at a rate of 15% - 20% per year, but the steepest decline in value is typically in the first year at an average of between 20% and 25%.
Alternatively, the bulk of a used car’s depreciation value has likely already occurred before you purchase it. So not only is a specific car cheaper to buy second-hand, you’re also likely to lose less money in the long run when you sell it later on. However, the disadvantage is that you never really know how the previous owner has looked after the car. Also, depending on its age or mileage, the original warranty on it may already have expired, which means you’ll have to pay for a pre-owned warranty out of your own pocket if you want one.
The details of your warranty
If you’re buying a brand new vehicle, chances are the vehicle manufacturer will offer a standard fixed-term warranty and maybe even a service plan with it. The terms of these warranties vary from manufacturer to manufacturer and even from model to model, so be sure to check out the standard perks of all the cars you’ve got your eye on before making your decision.
If you’re buying a second-hand car, depending on its age, mileage, and the terms of the original warranty, you may be able to enjoy a few more years or months of cover. However, if the manufacturer’s warranty has expired, you will need to look at taking out a motor warranties and service plan from a third-party provider, which can add to the expenses of vehicle ownership.
The ins and outs of car insurance
Car insurance can be confusing, but sitting down and doing your homework is important. Since it’s recommended to have insurance on your vehicle, you want to make sure you fully understand the implications, costs involved, and what’s covered in the event of an accident. Much like finding a motor warranty, it’s helpful to compare multiple car insurance quotes before selecting an insurance policy.