When thinking about purchasing a new car in today’s financial climate which is the best option for people on a budget? Nowadays many people can opt for different ways to get a car: used, leasing or new car offers – but which is the best choice?
For people on a budget they have to buy within their means. The cheapest way to obtain a car is buying used/ pre-owned. A benefit with buying this is that most of the time a new car will decrease in value by 25%-40% – this is a significant loss accumulated over the first two years. So why not let someone else take the percentage decrease? Purchasing a slightly used car that is two years or older could prevent from this drastic depreciation occurring and provide you with a cheaper deal. Obviously the negative with a used car is the fact you can never be guaranteed the car is in working order, although most cars have long warranties that may still be in effect.
Leasing a car is an option that has appealed to many people. Leasing a car has advantages and disadvantages that many should consider. A large payment isn’t needed to be put down on the vehicle, it only tends to be the first months payment, taxes, registration and security deposit amongst a few others. When you have reached the end of the lease you don’t have to worry about selling it on. The negatives with leasing are no damage can occur to the car, the agreed mileage needs to be met otherwise servicing can be refused, no modifications can take place as you technically don’t own the car and you will need maximum insurance cover.
Dealerships at the moment are trying to retain customer loyalty; one way they are doing this is through offering cars on finance. With many new car offers available at the moment a deal can be easily found with little deposits needed and low monthly fees. Take for example with this Hyundai dealership, a new Hyundai i20 can be financed with a deposit of £159 and the same price per month. Offers like this are very appealing for people on a budget as the cost is spread out and a lot easier to handle. The customer will have the peace of mind that the car will be under warranty and perhaps less will go wrong with a new car than a used car might, tax will be low and less costs will be carried out on maintenance. There are disadvantages however with depreciation occurring within the first two years, and some offers do contain high interest rates so it is always worthwhile checking the interest rates with each offer.
There are many advantages and disadvantages of the different ways to acquire a car. Weigh up each decision and decide whether or not it will suit you and your finances available. Don’t jump in at the first offer available shop around and try to find the best deal out there for you.