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buying a new car

There are many things to consider before purchasing any car, but buying a new car might spark particular questions. There are pros and cons to buying a new car, just as there are pros and cons to buying used cars.  First off, when purchasing any vehicle, ask yourself “Why am I buying this car?” Is it for daily use, will you need a lot of storage space, seating space? Make sure the makes and models you narrow your search down to are practical reflections of how you will use the car.

You may love the look of a larger vehicle, but if you don’t have five children, you might not need that much space and that particular car may not be right for your daily commute and errands.

After you’ve considered the personal aspects of which car to buy, move on to the less subjective parts of the process:

1. Depreciation

Most cars depreciate at about 15% per year. With new cars, there is a 20% depreciation rate as soon as you drive off the lot. You want to consider this before you decide to buy a new car, especially if you can’t put much money down as a down payment. Chances are you’ll be upside down on your car loan almost immediately if you’re financing the entire cost.

2. Cost-to-own

Also, consider the true cost to own the car you’re eyeing. These costs include insurance, fuel, maintenance, and more. Maintenance costs vary by manufacturer and model. Do your research—some manufacturers have better reputations than others. Some new cars even come with “free” maintenance plans for the first couple of years or for a certain number of miles.

3. How much can you afford?

Don’t guide yourself solely by what the dealership is willing to lend you. And, don’t be blindsided by an attractive low monthly payment—oftentimes tied to a super-long loan term. Use our online calculators and consider all aspects of financing—the total amount you are going to end up paying for that vehicle when it’s all said and done. That’s what matters.

We can help you before you even step on the lot. As a not-for-profit financial cooperative, we can approve you for an auto loan that fits your circumstances—and your budget. We won’t put you into a loan you can’t afford, and we’re happy to explain everything to you away from the high-pressure of the dealership.


  1. Ira on September 22, 2016 at 7:01 pm

    Hello.This article was extremely fascinating, particularly since I was searching
    for thoughts on this issue last week.

  2. Scott on October 28, 2016 at 2:47 pm

    I didn’t realize that most cars depreciate in value about 15% every year. This is something to keep in mind when shopping for a car. My little brother is looking into buying his first car. Perhaps he might consider buying an older car that can’t depreciate in value.

  3. Burt Silver on December 6, 2016 at 9:06 am

    My brother is talking about buying a new car. He has only ever bought used, so he is pretty excited about the prospect of something brand new. I agree that it is really important to think of how much the car is going to cost you after you buy it. He is going to want to make sure he buys something economical that won’t spike his insurance.

  4. Leviticus Bennett on May 31, 2017 at 8:26 am

    I like your point that you need to consider the costs of insurance, fuel, maintenance, and more for the car you’re thinking of purchasing. Because I’ve never bought a car before, your tips are extremely helpful. I’ve always wanted a Ram, so I’ll check to see how much maintenance costs for those.

  5. Craig on May 31, 2017 at 2:25 pm

    Anyone who are looking to buy a new car should read this post. Now it’s really easy to get help online when going to deal with car dealership. Very important step to go ahead. Thanks for your information.

  6. Jen on August 25, 2017 at 2:17 pm

    All 3 reason are good but I think there should be a 4th reason. You need to get at quote on the cost to insure the vehicle. So times that amount will shock you. It could potentially be quite a blow to your budget.

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