Car is becoming a need of the hour nowadays. Everyone needs it to travel or move from one place to the other. Besides a need to travel, it is also becoming a sign of luxurious life or a status symbol. Nowadays, the status of the individual is majorly defined by the car he owns. Everyone, even individuals with low income, wants to buy a car to match up with society’s standards. Those individuals with low income usually buy a used car, but those who earn much to buy a brand new car can go that way. In this article we will discuss Why Buying a New Car is a Waste of Money.
Buying a car might be a need, but buying a new car is considered a waste of money. A new car can signify a luxurious and rich lifestyle and can be used to show off to others, but it has drawbacks regarding spending the money.
So, Why Buying a New Car is a Waste of Money? Mainly because of the depreciation of the car. You buy a new car, drive it out of the dealership and the price drops, you will never be able to get the same amount of money, and the price of the car will drain your pocket for maintenance and moreover, the resell will fetch you ever depreciating amount.
Reasons why buying a new car is a waste of money.
David Bach, an author, stated that “A new automobile looks and smells nice, but it is never worth the money”. “Nothing in your lifetime will squander more money than buying a new automobile,” says the author. For those individuals whose income is not enough to buy the luxuries of life and save money by compromising on their needs, purchasing a new car is not a better decision. The following are why buying a new car is a waste of money.
New Car Prices are Higher than the Pre-Owned Car
Buying anything new is more expensive than buying a used thing. New car prices are rising day by day and becoming almost unaffordable for laymen. In comparison, the used car is relatively cheaper. When buying a new car, one has to pay more money, and after a few months, the car’s value does not remain the same as the new one, and it is labeled as a used car. New vehicles are not only more expensive than old cars, but they are also never truly new. Any car you buy starts losing value the moment you buy it. Furthermore, new cars lose their worth far faster than secondhand cars. One who wants to buy a car and does not have enough resources should consider buying a used car rather than indulging in society’s standards and buying a brand new car.
Depreciation of the car’s value with time
Whether it is a washing machine, refrigerator, or other, every machine depreciates over time, as does the automobile. The automobile begins to depreciate the moment one drives it off the lot: Research proved that the new car’s value is reduced by 2-3 percent after 8 minutes of purchasing. By the end of the first year, one’s car’s value has dropped by 20 to 30 percent, and in five years, it might have dropped by 60 percent or more.
Some individuals borrow money from any bank or close ones to acquire that automobile. The amount of loan they have to pay is not reduced, but the car loses its value after using it for some time. “Why would someone borrow money to purchase an item that instantly loses 30% of its value?” For those individuals who barely afford to buy a new car, it is a better option for them to buy a car that is used for two to three years after lease as it is usually in a better condition and benefits in saving the 30 percent of your amount.
Extra Charges While Buying a New Car
Besides being more expensive than the used car, buying a new car includes many other charges. For example, after buying a new car, the owner has to register the car and attach the number plate on it so that the legal authorities can deter thefts or criminals or find a car if stolen. It helps to know about the owner of a car. When buying a new car, the owner must have to spend money to register his car. Whereas a used car is already registered and one has not to pay to register it.
Besides the number plate, the owner must pay higher insurance charges for a new car. Car insurance has many benefits as it covers any damage to a car in an accident. These charges are lowly paid when buying a used car compared to the expenses when buying a brand new car. One has to pay any other expenses when buying a new car, including seat cover, car tracker, back cam, etc. On the other hand, these expenses are reduced when buying a used car.
Buying a new car is not a good investment. It is much more expensive than the used car, and one has to pay a large sum of money when buying a brand new car. Buying a car depends on one’s financial condition. The one who is a millionaire and can afford to buy a brand new car can buy a new car and fulfill his desire. But for individuals with low income, buying a new car is not the way to go.
The combination of soaring new car prices and weaker salary growth means that owning a new automobile is no longer feasible. Why spend hundreds of dollars on something that will fast lose its worth and appeal? In all, the pleasure of the new will fade off after a few months, and your vehicle will become just another used automobile. The payments are the only thing that won’t go away! On the other hand, you can acquire the same product for less money if you wait a few years.
But, one must be careful and have expertise while buying a used car. They often fail to buy a pre-owned car in a better condition, and as a way to save money, they buy a car with mechanical faults.
You might need to own a car when public transport is not good, there is a problem with last mile connectivity, and when you do not want to be dependent. Especially the public transports are all time-bound. But, be mindful of the maintenance cost, resale price, and predictability and stability. You do not need a fancy car that is not dependable. Most probably you will be better off with a used car, a popular model that is in the market for a long time.
Nowadays there are many start-ups providing a digital platform to buy a used car, you can check out Spinny, Cars24, Ola, etc.