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New or Used Car

          There are many differences between buying a new car and buying a used car.  A new car has many different positive aspects than positive aspects of a used car.  On the negative end many may feel that a used car has many more risks than a new car, but under the right circumstances and today’s laws these risks are becoming less and less common.  I will explain why used cars are the better choice in today’s market and how much one could save when looking at the latest model of Mitsubishi eclipse from Mitsubishi Motors. 

          According to Autobytel.com “there is a huge pool of 2-3 year old, well-maintained vehicles on the current market.”  This is great for the used car buyer who wants to get the most variety out of car shopping.  Also, the money saved could lead to being able to purchase a fancier car than if a person bought new.  Used cars do not have to experience instant depreciation that new cars are subjected to.  Used buyers can expect the car to depreciate at a rate of 10% if they buy it four years old.  There is also great price variation between cars of the same make and model, so price does not restrict one as much as it does with buying new.

          These positive aspects may be alluring, but new cars also have their upsides.  Newer cars are subjected to being issued a generally lower financing rate.  They offer the ever-popular new car smell, but this can be obtained by air fresheners for a used car.  New cars alleviate the hassle of not knowing who owned it before and any problems that my come out of the previous owner’s actions.  They also can be custom and made to order if a person is looking for something very specific or a variety of options.  Although both options provide positive attributes about them, both also have negative points to consider

          The negative aspects of buying a used car are slowly becoming less risky than they have been in the past.  A huge risk in the past was that they came with no mechanical certification or warranty protection.  This is changing by way of “certified used car” and vehicle history reports.  Currently there is no Lemon Law coverage on used cars, which means that a person is stuck up a river without a paddle if they buy a lemon or a salvaged car without the seller telling them up-front.  Used cars are also subject to higher financing rates, but this is understandable because there are less factory-subsidized financing deals which may prove in the future to not be the case since there are becoming more used cars on the market.  Although these negative aspects may dissuade some from buying used they may cost less in the long-run than a new car.

          A new car costs a person money as soon as they drive off the lot.  The car realizes instant depreciation the day it is bought.  New cars depreciate 50% of their value within the first four years of ownership.  If a consumer finances the new car they are already upside down on their loan when they drive away from the dealership.  If they do not purchase GAP insurance, and their car gets into an accident that totals the car, they could end up paying for a car they do not even own or drive anymore.  There is also the consideration that there is less price variation, so the amount of money one has to spend severely limits the selection of cars one can buy.

          To illustrate that a new car is a better choice we will look at the newest body style of Mistubishi Eclipse.  A 2009 Mitsubishi Eclipse Coupe Automatic GT is $24,999 MSRP.  This, compared to a 2006 Mitsubishi Eclipse GT at $15,950 with 22,801 miles on it shows that buying used is a great deal.  There is an initial savings of $9,049.  If a person was to put a down payment on a new car of the used car price they would still end up financing almost $10,000.  If they took out a 4 year loan they would have a 6.86% financing rate assessed to their loan, and they would end up spending $12,744 on the loan plus the initial $15,950 for a total of $28,694 when they could have had the same looking car for almost half the price. They would also not be in debt with the car for four years where something could happen to it, which would result in them losing the car and still being in debt, looking for a new car.

          From this analysis we can see why the used market is the trendy market of the future.  The variety and increasingly less risk involved with buying used is becoming more attractive to consumers daily.  New cars may be a fun experience, but buying used is definitely the practical way to go.

Works Cited

1.) “2009 Mitsubishi Eclipse Styles”, http://www.edmunds.com/Mitsubishi/eclipse/2009/index.html – July 21, 2008

2.) “Find Cars for Sale”, http://Edmunds.autotrader.com/fyc/compare.jsp?doors=&systime=&position=top&position – July 21, 2008

3.) “New or Used”, http://www.autobytel.com/content/Research/index.cfm?id=4;4&action=neworused – July 21, 2008

About the Author

Amanda

River Car Shops

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ok so why r u asking this question