The end of the year is a great time to buy a car. Dealerships are trying to empty their lots to make room for the new model year vehicles and they are trying to meet their quarter end and year end sales goals. This can translate into lower prices for the consumer.
Here at Denver West Insurance Brokers, located in Golden, CO we’d like to share some things to consider when you’re looking around the lot — and when you’re trying to answer the age-old question of “new, or used?” Read on with an open mind, and you might just come to a different decision the next time you’re on the car lot.
New cars
Who doesn’t love the smell of a new car. It’s one of the things that people love about climbing into a brand-new car. But like anything in life, there are other benefits and drawbacks to buying new.
• PRO — maintenance: Some manufacturers offer free scheduled maintenance for a set period of time after you buy the car, and you likely won’t need a new battery, tires, etc., for several years after your purchase.
• PRO — peace of mind: Your new car may have a warranty for up to 10 years, and also is covered by “lemon laws” that could allow for a replacement or refund if the car has serious defects.
• CON — cost: Depending on the make and model, buying a new car is almost always more expensive (at least in terms of the purchase price) than a used car.
Remember, if you purchase a new car in its first model year (meaning it’s a new model for the automaker), there won’t be many user reviews available, and data on reliability and repairs will be limited. In addition, sometimes newly introduced cars have some kinks that generally are ironed out by the second and third model years. These aren’t necessarily serious issues, and the warranty should cover them, but in some instances, you and your car could be headed to the shop more than you’d like.
Used cars
Don’t care about the new-car smell? Looking to save some money on your purchase? Well, a used car might be right for you. There are many advantages to buying used, but you’ll want to be a little more careful. After all, it’s hard to know exactly how well the previous owner treated the car. But you can limit your risk with a little bit of work.
• PRO — cost: New cars depreciate quickly after they’re purchased. By buying used, you’re letting someone else take that financial hit over the first few years of the life of the car.
• PRO/CON — reliability: Buying a used car is less of a gamble than it used to be, particularly with the advent of “certified pre-owned” programs many automakers now offer. However, used cars generally don’t carry the same warranties as new cars, even though the original manufacturer’s warranty is usually transferrable to a second owner.
• CON — maintenance: While a used car theoretically shouldn’t need more frequent maintenance than a new car, you’ll likely need to replace things like tires, headlights, etc., earlier. And scheduled maintenance probably isn’t covered by the automaker.
• PRO/CON — history: You’ll need to check the car’s title history to make sure it hasn’t been in a serious accident or salvaged. Ask the dealership to provide this information, usually from Carfax.
Whether you buy a new or used car, make sure to contact your local insurance broker or local insurance agent to determine the cost of insuring your dream car …. BEFORE ….. you make the purchase. Model years and model types can vary the insurance cost greatly. You’d hate to find out after-the-fact that the cost to insure + loan payment is more than your budget can afford.