Why Buying a New Car is a Bad Investment

Car sales buying a new car

While there are some perks to purchasing a new car, you will find that it is actually a terrible use of money and not a good idea for anyone that is looking to use their money smartly. Instead, you are much better off shopping in the used car market or leasing a car – both of these methods are a much better use of your money.


So, why is buying a new car a bad investment? A new car is not even technically an investment because it is a continuously depreciating asset. Vehicles start depreciating from the moment that they drive off the lot and the rate of depreciation is higher in the first three years. In fact, a car can lose as much as 35% after just one year and over 50% after three years.

Alternative Options

This means that you will be taking a huge financial hit if you decide to sell the car on down the line. While you will still be taking a financial hit if you buy in the used car market, you will have sidestepped the biggest drop in value, so it is not quite as bad. Leasing, meanwhile, allows you to completely avoid depreciation because you can simply hand back the keys at the end of the agreement (this also means that you do not have the hassle of trying to sell the car).


The other main reason that buying a new car is not a good use of money is the fact that they can be so much more expensive than used cars. The price tag is huge for new cars and this means that you can get much more for your money by shopping in the used car market, particularly when you shop at reliable NI used car dealerships where you can often get the best deals and finance options.

Used Cars

It is much better to shop in the used car market because depreciation is not as much of an issue and you can get much more for your money. It is important that you are vigilant though and always carry out a thorough vehicle examination and take it for a test drive – you should also always get a vehicle history check carried out, particularly if you opt for a private seller.

Getting a brand new automobile might be tempting but it is not a smart use of money because they can be so much more expensive and they will lose a huge amount of their value immediately – this is why those that want to own a car should look in the used car market.