Is it better to buy a used car or go with a new vehicle? Let’s compare the options of buying a new or used car and give you some good information to make an informed decision.
Buying A New Car
Since the car is brand-new, it has never been driven. You don't have to worry about whether or not the previous owner didn't take care of the vehicle, or any hidden issues there may be with a used vehicle.
Choose the Car that you Want
When buying a brand new car you can choose any car you would like, right off the lot. If there are specific options, or a specific color you're looking for, a dealer can order a car to your exact specifications. Remember, however, there may be added costs for this option.
Warranty
Warranties for new cars are usually more robust and cover more than those for used cards. Although repairs can be expensive, most warranties cover the first three to five years of ownership.
Price
New cars cost more than used cars. Even with rebates, discounts and negotiation, you will be paying a premium for the car. This is also true for the newest model years and the more popular vehicle models. Insurance costs are also traditionally higher for new cars.
Depreciation
New cars depreciate or lose value pretty quickly. On average, a new vehicle will lose 10-20 percent of their original sales price during the first year of ownership. That comes right out of your pocket and should be factored into your purchasing decision, particularly if you know you will be trading it in within five years or so.
Buying A Used Car
Price
Price is the single biggest advantage to buying a used car. For example, a used car with low mileage will or one that is even two to three years old will cost far less than a brand new car.
Less depreciation
Yes, a used car will continue to lose value the older it gets and the more miles you clock. However, the year-to-year differential is almost always less with a used car. Where a brand-new car might be worth 30 percent less than you paid for it by the time two years have passed, your used car will typically lose only about 10-15 percent of its value over the same time period.
Unknowns
Be careful when buying a used car. It may have been in an accident, poorly maintained, or not serviced per the factory recommendations.
Maintenance
A used car will not last as long as a brand-new car, no matter how well you care for it. While many used cars come with a limited warranty, those warranties aren't as long or as robust as new car warranties. It's important to make regular maintenance a priority for a used vehicle.
Summary
When considering buying a new or used car, there are a lot of important factors to consider, so take your time in making a decision. Consider your budget, along with your needs and your wants. Some people choose to only purchase new vehicles. Other people consider cars as simply a mode of transportation. Maybe you are in the middle— you want a good, safe, reliable vehicle, at a fair price. Carefully consider your options and you’ll come to the right decision.
Looking for a car loan?
Find out what you can afford!
