New car shopping is an exciting experience. Knowing that a car has not previously been owned and that you are the only owner can be enticing. However, in most cases, new cars cost more than used cars. They also depreciate almost immediately and significantly. One perk though, is that you can usually get a lower interest rate on a new car when financing. Lenders would rather finance a new car and offer better rates on them since they are worth more.
There are some dealers that will allow you to purchase a car without putting down a down-payment. It is in your best interest to put as much money down on a car as you can though, since this will lower the amount of interest you will pay over the life of the loan. Be sure it is a new car you are looking to purchase. There are used cars out there that are almost as nice as new ones. Make sure you are purchasing a new car for the right reasons and not just for the smell.
New cars usually come with a warranty as well. You can however, purchase an extended warranty on a used car to protect your investment. Take all aspects of whether to purchase new or used into consideration before making your final decision and financing a new car.
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Published in by CARCHEX on April 8, 2015