Association of National Lenders: Members Updates

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New or Used Cars: Which Is It To Be?

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Some people always prefer to buy a brand new car, irrespective of their financial situation, and there are some, who might be wealthy to say the least, but believe in buying only used cars! But for those who are undecided, what is the final verdict? Is it better to buy new or used car

The answer is that there is no fixed answer. It depends totally on the personal situation and needs. A huge number of popular makes and models are available, but there is bound to be a greater choice of selection while buying a brand new vehicle.

Relatively new second hand cars are often in great condition and low on miles but cost significantly less than their brand new versions. This is because of quick depreciation. Cars, unlike real estate, depreciate quite quickly.

According to experts, the value of a vehicle depreciates about 75% after about 2 to 4 years of use. This also translates into the buying cost for a used vehicle.

While buying a car on loan, interest rates become a factor to consider carefully, especially if the loan term is not that short. Since there is a lesser risk for lenders when it comes to a brand new vehicle, interest rates tend to reflect that and tend to be lower than those on used car loans.