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5 NAECU.ORG NOT FOR PROFIT, NOT FOR CHARITY, BUT FOR SERVICE Both new and used cars carry their own benefits and drawbacks. New cars are often covered by a manufacturer's warranty, which means you don't have to worry about paying for any major repairs in the first few years. However, new cars lose approximately 18% of their value in the first year alone. The rate of value loss slows down as a car ages, which makes a used car a more appealing purchase in terms of resale value. It also costs less to insure an older car, although an older vehicle tends to require more maintenance costs and may be less fuel-efficient than a newer model. Certified pre-owned vehicles may be the most cost-conscious option. These used cars are typically only a few years old and have been thoroughly restored and inspected, reducing the risk of hidden repair costs. They also come with warranties similar to a new car but without the sticker shock. New or Used? Fill 'Er Up When considering which car to buy, don't forget to factor in ongoing expenses of owning and maintaining the car—including fuel cost. The U.S. Department of Energy offers a helpful breakdown of savings according to a car's fuel efficiency. As you can see in the chart below, buying a 35-mpg vehicle versus a 25-mpg vehicle can save you more than $700 annually if you drive 20,000 miles a year. READY TO BUY A CAR? VISIT YOUR LOCAL NAECU BRANCH. WE CAN TALK THROUGH YOUR FINANCING AND COVERAGE OPTIONS, INCLUDING GAP COVERAGE AND OUR LOWINTEREST VEHICLE LOANS. LEARN MORE ABOUT OUR LOANS AND DOWNLOAD A PREAPPROVAL APPLICATION FROM NAECU.ORG. → RESIST OVERPRICED INSURANCE ADDONS. If you choose to finance through the dealership, watch for unnecessary or expensive warranties and supplemental auto protection coverage. If you're in the market for additional coverage options, try your local credit union first. For instance, automotive dealers routinely charge up to $700 for guaranteed auto protection (GAP), a type of supplemental coverage that pays the remainder of the cost not covered by your primary insurance plan for a totaled vehicle. GAP coverage bought through a dealership is also frequently financed into the auto loan, which means you're paying interest over and above the flat fee. NAECU offers members GAP coverage for a flat $195 fee per covered plan. D o … ' m ‡ „ t h ˆ s pe ci a ‰ o Š e r . NAECU is offering a fixed-rate car loan for as low as 2.49% ANNUAL PERCENTAGE RATE through May 2014. 25 mpg 30 mpg 35 mpg MILES DRIVEN → FUEL ECONOMY↓ $1,860 $1,550 $1,329 15,000 YEARLY FUEL COSTS 20,000 25,000 $2,480 $2,067 $1,771 $3,100 $2,583 $2,214 *BASED ON $3.10/GALLON AVERAGE PRICE OF GAS MOVING PARTS Another ongoing expense to consider? Repairs. High-end luxury vehicles tend to have a larger number of imported parts, which can be costlier to replace. Popular brands may not be as glamorous or unique as a European sports car, but repairs are often significantly less expensive.