Why Buying a New Car for Your First Vehicle Can Be Cheaper Than Buying a Lemon

Monday, July 29, 2019, 6:00 AM | Leave Comment

Buying your first new car can be incredibly exciting. It’s a time for celebrating independence, mobility, and it’s even an entry into the adult world for some.

It’s also something that can represent one of your first big financial responsibilities.

If you’re looking to buy, your immediate response might be to look for something cheap.

As you can see below, it might actually be better to buy new than to buy a lemon.

Why Buying a New Car for Your First Vehicle Can Be Cheaper Than Buying a Lemon

  • Dealing with Insurance Costs

    Forty-eight out of the fifty states in the US require drivers to carry insurance, and a fair bit of what you’ll be charged relates to the car you drive. While new cars tend to cause your insurance costs to rise a bit when you finance them, they’re actually cheaper in the long run. Why? Largely because new cars tend to have the safety features that insurance companies love.

    Most insurers offer discounts for features like anti-lock brakes or alarm systems, so buying a slightly more expensive car might actually net you a significant amount of savings over time.

  • Warranty Cost

    If you’re not looking to pay for car repairs out of pocket, you’ll absolutely need a good warranty. Most new cars come with at least some warranties attached – getting thirty to fifty-thousand miles for your power train, for example, is fairly common.

    Older cars, however, have generally outlived their factory warranties. This means that you’re going to have to pay out of pocket for coverage, which can actually cost you more than the total amount of repair coverage you’ll need over the life of the vehicle.

  • Refunds, Promotions, and Deals

    A new car is almost always more expensive than an older car. With that said, new cars are often eligible for promotional credits that make them cheaper than older cars once you factor in financing.

    Some companies offer lower interest rates on new cars for students, while others might have a yearly special that reduces APR to zero percent on the newest model-year vehicles. If you can negotiate well enough, you might be able to find new cars for sale that cost less than even a lemon.

  • Long-Term Investing

    One of the best reasons to buy a new car is that it lasts longer than a lemon. Cars released this year are expected to have a lifespan of at least eight years, while financing is usually done over the course of five years.

    If you buy new, then, you can expect to drive your car for at least three years after it is paid off. If you finance a lemon, though, your car might only last for a year or two after you’re done paying it off.

If you’re buying your first car, consider buying new. It’s often more affordable than you might think, and doing so can save you money. Picking the right car takes time, but a little research will help you to find your perfect first vehicle.

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