If you read most personal finance blogs, you will hear the majority talk about how you should never ever buy a new car. It’s a waste of money since it depreciates (loses value) the moment you drive it off the lot. While it does lose value immediately, I am here to argue that buying a new car isn’t the end of the world. If you play your cards right, buying a brand new car can be a smart move for you to make. Here are my reasons.
Why Buy A New Car
Today’s cars are put together with the greatest of care. No car manufacturer in business today can afford to put together a car half-heartedly or use substandard parts. The stakes are too high. One major recall and you destroy your brands reputation and have to work that much harder just to get it back.
I remember growing up some car manufacturers were looked at as the joke of the industry. Now those same companies are the ones taking the biggest chunks of sales from the leaders. They are innovating themselves and making a much better product. The chance of you buying a “lemon” is much less likely.
Cars made today are much safer than those made just 5 years ago. I won’t even talk about cars that are even older. With more airbags, stronger frames and pre-collision detection systems, cars made today are the safest they have been. If making sure your families safety is your top priority, you can’t go wrong with a new car.
I touched on some new safety technology in cars today, but the new technology doesn’t stop there. Add in hands-free phone features and voice commanded navigation and you rarely have to take your eyes (and attention) off of the road.
With more consumers opting to buy a used car, resale values of cars remain high. What this means is that new cars don’t depreciate as much as they used to. But don’t confuse this with them not depreciating at all, because they still do, just less quickly.
Also with more consumers buying used, the demand for new cars is slipping. This is forcing dealers and manufacturers to hold sales, offer rebates and other incentives and offer better financing terms. This is certainly a win-win for consumers.
So Should You Buy New?
This question isn’t as easy to answer as it all comes down to you and what makes the most sense for you. When I was in the market for a car I opted for a new car. I was able to negotiate a great price, obtain a loan for under 2% and got free maintenance for the first 3 years of my car. Since I keep my cars for a long time (usually 10 years), this was the best option for me.
The idea behind just buying used because it is a smarter money move is no longer valid. You have to take into account your situation and figure out what makes the most sense for you. This is why I love personal finance so much. For most topics, what works for me might not work for you and vice versa. We can go online and read how other people handle their finances, learn, and see if that approach works for us. If not, we can simply modify it so that it does.