BUYING A new car will be the second biggest purchasing decision that you will face in your life. But how do you finance such a sale? We take a look at the pros and cons of splashing out on a brand new car or a used motor on finance or leasing.
If you desire a new car but can’t quite afford the hefty price tag, a slightly used car could be the best alternative. Purchasing a set of nearly new wheels (two or three years old) will prevent you from experiencing the 25-40 percent depreciation over the first two years. So why not let someone else take the percentage decrease? The negatives with purchasing a used car is that you don’t know 100 percent that it’s in fully working order. Costs on repairs and servicing may prove to bump the price up at a later date.
Leasing is another option to consider. A deposit isn’t necessary to be used as a down payment and the first initial outlay tends to be the first month’s instalment, taxes, registration and a security deposit amongst a few minor fees. At the end of the leasing deal the dealership can sell the car for you or you can make the decision to buy it yourself. The down-side with leasing a motor is whilst you’re in the leasing deal you don’t own the car so full insurance tends to be insisted upon. Also, modifications are not allowed and mileage needs to be agreed on and not exceeded.
Dealerships are currently aiming to retain customer loyalty; one way they are doing this is through offering new car models on a finance deal. New car offers are available at the moment with little deposit and low monthly fees. Take a look at this Hyundai dealership which is offering the new Hyundai i20 with a deposit of £159 and monthly fees of the same price. If you’re seeking a new car but just have the initial one off payment this is a very appealing option.
One of the main advantages of financing a new car is that the car is under warranty, the chances of faults occurring are almost zero, tax will be low and less cost will be spent on maintenance. The disadvantage is the depreciation in value over the first two years and also some offers do contain really high interest, so make sure to research the best rates around.
Each method of acquiring a new set of wheels comes with advantages and disadvantages. Evaluate each choice and decide whether or not it will work for you. It’s an exciting process but everything should be taken into consideration.
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