An investment is a process of putting money into a venture to make a profit or returns. If considered in the strict context of this definition, then a car, whether used or new is not an investment unless it is used for transport business like taxis, logistics, etc. But if you want to consider the angle of fewer maintenance costs, repair costs, durability, or mileage: generally comparing money spent on transportation viz-a-viz money spent on car maintenance, that would introduce the investment angle to car ownership. The comparison between used cars and new cars has been ongoing for years, with some people citing the opinion that used cars experience lesser rates of depreciation than new cars, and can usually sell off the used car closer to the amount that it was purchased.

However, dealers and manufacturer incentives can provide tailor-made car finance options that will make the above point moot. If you are considering whether a brand-new car is a better investment than a used car, then you might want to consider the following points:

  •         Brand new cars are in top-most conditions, and therefore require fewer repairs in the first few years, which means that the buyer gets to save money that would have been spent on those.
  •         Brand new cars often make improvements on technologies like back cameras, Bluetooth connectivity, and navigation systems, all of which can contribute to the productivity of an individual to work and keep connected even as they commute.
  •       Brand new cars mostly have warranties, which means that if anything goes wrong with your vehicle within the period covered by the warranty, the company/dealer/manufacturer handles it. That helps to save money.
  •         Newer cars have better mileage for gas. Also, the wear and tear that happens to the parts of the car can increase the emission level of cars, which means that new cars have reduced emission levels, and therefore are better for the environment.
  •         You can get financing deals that have lower interest rates from your dealers with a new car. To know more about this, read other finance companies reviews before you make a decision.
  •         This is not to say there are no disadvantages in buying a new car, with the major being that depreciation starts immediately you make payment for the car, and continues through the first three years. This means that individuals who cannot afford to lose money should not bother buying new cars, as that is what happens in the first few years. What’s more, alterations in designs and functionality might happen to a new vehicle, which would leave you stuck with a car that might not be easily maintained or repaired because that particular model was upgraded after the first few specs.

Deciding on buying a new car is not something to be rushed into. You have to consider your financial capacity before you take this major step, and it is not advisable to service a car loan alongside other loans like student loans. Much more painful is the repossession of cars as a result of default in payment. There is an opinion that if you cannot afford to pay off the car within three years, you should not bother buying it, be it used or new.