It’s an age-old debate whether it is better to buy cars used or new, and which kind of financing is the best value overall. In this article we’ll be giving our take on how this question relates to Mercedes-Benz in particular.
Should You Buy Used or New?
Luxury cars are much more prone to depreciation than any other kind, so it would be easy to say that buying used has the better value, but it’s not quite that simple.
One of the major points of appeal for a luxury car is having all of the latest technology, both in the cars inner workings and on the dashboard, but when you buy used you will always be a little bit behind the cutting edge.
You also lose a lot in terms of options—buying a new Mercedes puts a lot of power in your hands and lets you decide exactly what you’ll be getting, whereas with used cars you are limited both by what drivers before you have chosen, and which specific cars are currently on the market. Overall we have to lean toward buying new.
How to Finance It
The next question is whether to buy it outright, lease it, or buy it through hire purchase. Obviously buying the car outright is the simplest option but not really workable for most people when we’re talking about top-of-the-line luxury vehicles. Assuming this isn’t on the cards for most people, let’s compare the other options.
Hire purchase lets buyers pay over time, but they do not own the vehicle until the full cost has been paid off—or rather, more than the full cost; interest makes this one of the most expensive ways to acquire a car long term. This is compounded by the fact that a Mercedes will usually be on the pricey side to begin with, so that interest really adds up.
Personal Contract Hire is similar, but repayments are lower you would in this case only pay off the initial value less the resale value. Then the hire company would reclaim the car and sell it used, though you would have the right to pay off the remainder yourself and take full ownership. For a Mercedes, repayments will still be quite high as resale values are much lower than initial values.
Leasing may well be the best option here—you don’t need to worry about resale value, and the leasing company should cover service costs too, leaving you with a fixed set of repayments to make over a fixed period. It’s a more affordable way to get the latest and most lavish cars, which is what a luxury brand like Mercedes is all about.