As we discussed last time, buying a new car can be terribly exciting and it can have a number of perks that make the sticker price well worth it for some. There are a few potential cons that go along with making this move, however. Understanding them can assist you in making the decision of whether to buy brand new or take a look at the used car market.

When you purchase new you do benefit from such things as a warranty, buyer incentives and the knowledge that a car has only had a few miles put on it previously. Still, these potential cons should be weighed carefully. The downside of going new can include:

• Depreciation – The actual depreciation rate can vary between makes and models, but this is a factor to consider. The fact is when a new car is driven off the lot, it will lose thousands of dollars in value instantly. In some cases, depreciation can eat up a huge amount of the purchase price of the car, putting a driver in an upside down loan situation instantly.
• Pricing – Used car prices are generally much lower even if a used car is only a few months old. This is partially due to the fact that someone else has eaten the depreciation costs.
• Payments – While it is not always so, generally it will cost a fair amount less to finance a used car than a new one. Since the overall costs are lower, the monthly payments will be, too. Plus, it is often possible to purchase used outright rather than having to deal with financing.

Buying new versus used does have its ups and downs. When having a warranty and peace of mind in place are musts, new is the way to go. If potential value is the concern, used might be right up your alley.