What Should We Consider When Choosing a New Car?

When we are about to choose a new car, we might feel a bit overwhelmed by all the options. We can choose everything from the fuel we use to how we will look driving down the road. Before we even consider putting down a down payment, we should consider how we will be using our car, what fuel we want to use, and how we will pay for our car. While we may feel stressed when considering all our options, we can take it step by step and choose the most suitable car for our needs.

How Will We Use Our Car?

When buying a new car, it is critical to understand how we will be utilizing it. We might choose a small car if we are just planning to typically use it for errands across town while we might need a heavy-duty vehicle if we will be doing a lot of off-roading. In addition, if we are planning to move a lot of people around, we might want a minivan. Alternatively, if we are hauling a lot of stuff a truck might be more useful. Once we know what we will be using our car for we can move on and consider the type of vehicle we need.

Brand New or Used?

The next thing to consider is whether to buy a brand new car or a used car. Most people buy a used car, because it is the most affordable option. However, there are benefits to buying a brand new car instead if you can afford one.

Why Buy a Used Car?

There are many benefits to buying a used car including:

  • Cheaper prices
  • Less reliance on finance
  • Cheaper insurance
  • Less depreciation
  • Greater range of cars to choose from

There are exceptions to some of the above. For instance, some classic collector cars are very expensive. Similarly some very old cars with a high mileage are expensive to insure. However, for the most part, used cars are much cheaper.

Used cars are generally less reliable and may need more frequent repairs. Very old cars may even benefit from upgrades such as this Mustang coilover kit to make them more friendly to drive. Used cars can often be less fuel-efficient, and while you’ll find plenty of petrol and diesel cars, you may struggle to find many used electric cars for sale.

Why Buy a Brand New Car?

Buying a brand new car has several benefits including:

  • Access to all the newest technologies
  • Improved safety
  • Greater reliability
  • Improved fuel-efficiency and wider range of electric/hybrid vehicles
  • Ability to explore customization options when buying directly from manufacturer

Brand new cars are often thousands of dollars more expensive than used cars. In fact, new cars in the US rarely come on the market for less than $15,000, whereas used cars can be bought for less than $1000 if you’re on a really tight budget. Most buyers have to rely on finance. Insurance can be very high for these vehicles because they are a target for thieves (although they are generally much more secure). You should also factor in depreciation – cars can lose thousands of dollars of value in the first few years, but may only lose hundreds of dollars of value after reaching 7 or 8 years old.

What Type of Fuel Do We Want to Use?

We have three major types of cars to choose from. We can stick with a traditional combustion engine that requires gasoline, an electric vehicle that runs on electricity, or a hybrid that works on a combination of gasoline and electricity. If we are thinking about buying an electric or hybrid car, we need to consider how they would affect our daily life. For example, do we know where the nearest charging stations are or how often we might need to plug in our car? Understanding the pros and cons of these vehicles is important.

Pros Of Hybrid and Electric Vehicles

Saving Money on Fuel

Although we might consider the high initial expenses of electric and hybrid vehicles as “cons,” these vehicles often cost us less to operate over time since they cost less to fuel. While in the past it has sometimes been challenging to find Tesla charging stations outside of major cities, today many small to medium-sized communities have developed the necessary infrastructure.

Protecting The Environment

Depending on the type of vehicle, hybrid and electric vehicles can help us drastically lower our emissions. These cars often emit zero tailpipe emissions. This means that the environmental impact comes down to how the electricity is generated. Electric vehicles can be a wonderful option for the environment if the electricity they use is generated from renewable sources such as solar or wind.

Cost Saving Credits and Tax Breaks

If we are thinking about going electric, it is important to know all the ways we can save money on our purchase. All-electric and plug-in hybrid vehicles are eligible for a wide range of federal, state, and municipal tax credits. In addition, purchasing a hybrid vehicle may result in us having lower auto insurance premiums which can save us lots over the lifetime of our car.

Cons of Electric and Hybrid Cars

Historically Shorter Range

Electric and hybrid cars used to have a much shorter range than traditional cars. Today these vehicles have larger batteries. In addition, there is much more access to charging stations. The average range of an all-electric vehicle in 2020 was 260 miles, with some topping 400 miles. This means we do not have to stress about our car running out of charge when we are in the middle of traveling.

Higher Upfront Cost

Typically, we will find electric cars have a higher upfront cost than traditional internal combustion vehicles. But initial costs may be offset by fuel cost savings, federal tax credits, and state and utility incentives. If we do some research, we may find we can buy an electric vehicle at a comparable price point to other vehicles.

How Can We Pay for Our New Car?

Once we have decided on the car we want to buy, we must figure out how we are going to pay for it. Although a car loan is the most common method of financing a vehicle, it can be complicated. In addition if the market has changed, we might determine that refinancing our auto loan makes sense. Our monthly payments will often be reduced if we refinance at a lower interest rate. Over the life of our motor loan, we can pay significantly less interest.

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David is a 28-year-old struggling artist who enjoys planking, upcycling and binge-watching boxed sets.