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Pros And Cons Of Financing A Car

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The choice between a new and a second-hand car is made by almost every car buyer, regardless of their gender, age and financial situation. When looking for a new vehicle you could either purchase a used car or a vehicle on finance. In this article we will explain the benefits and drawbacks of a financed car. To determine if a vehicle is on finance you can carry out an outstanding finance check, this will provide you more details on the agreement along with the number and vehicle details.

What’s good about a new car?

 The car is at the peak of its form for the first little while and it doesn’t get any better.

a man and a woman inspect a car before buying
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Advantages of a new car:

  • it rarely breaks down;
  • it has a service warranty;
  • it is easier to get a profitable loan;
  • there is practically no risk of buying a broken, stolen car.

 All the disadvantages of a new car are in the field of finance:

  • it is more expensive;
  • it quickly loses in price: 10-20% of the price just by leaving the dealer’s gate.
  • the warranty applies only to those new cars that undergo regular maintenance, which is more expensive than a simple check.
  • buying a car on credit involves insurance at the expense of the owner.
  • dealers have less choice of new cars.

Pros and cons of a used car

teal 3-door hatchback on road
Photo by Oli Woodman on Unsplash

The main advantage of a used car is a lower price. And here are other advantages:

  • you can buy a car of a higher class due to a lower price;
  • after 5 years of operation, you can find new previously vehicles 2 times cheaper;
  • there is a bigger choice of used cars;
  • high-end cars are getting cheaper quickly;
  • all used car improvements made by the previous owner can go to the new buyer for free.

Cons of a used car:

  • The risk of hidden breakdowns.
  • Used cars cover less until the overhaul.
  • The repair takes more and more time.
  • A used car often consumes more fuel, oil, etc.

It is important to completely understand the pros and cons of a financed vehicle to better prepare for your decision.