01 Jun Should You Buy a New or Used Car?
For most, purchasing a car is a significant decision. It can be challenging to know what to choose with so many options. Whether you’re shopping for a new or used automobile, the number of options is sure to overwhelm you.
Of course, new and used cars have advantages and disadvantages, which we’ll discuss in this post. However, your budget will probably be the most critical factor in the entire process. Some of us cannot afford a new car, forcing us to settle for used. On the other hand, nearly-new cars can be appealing because they provide similar peace of mind as a new automobile at a lower cost. On the other hand, new cars might also be affordable thanks to current financing options.
Let’s discuss the pros and cons of new vs. used cars and the factors you should consider when deciding which type of car to buy.
Deciding to Buy New vs. Used Car
It’s critical to remember that every scenario is unique, and a new car isn’t appropriate for everyone. On a global scale, neither choice is necessarily superior to the other.
Whether to buy new or used is based on your priorities. If you are concerned primarily with price and only require transportation from A to B, the best choice is likely purchasing used cars. Buying used can save you a lot of money upfront, but it may end up costing you more in maintenance in the long run.
Consider the price you’re willing to spend, lifestyle requirements, and risk tolerance. Then, compare the cost of a new car vs. a used car in terms of upkeep and repairs.
Choose new if reliability and the “new car smell” are essential factors, provided your budget can afford a new vehicle. On the other hand, used cars are the best choice if you want to change cars often, you can do some repairs yourself, and you don’t want to spend as much money upfront.
Remember, you might have the best of both worlds by buying a newer preowned automobile that still has the majority of its warranty but has already taken the biggest depreciation hit.
Also Read: How to Get a Car Fast?
New Car Pros and Cons
Benefits of Buying a New Car
There’s no doubting a brand-new car’s curb appeal, from that new-car smell to the gleaming paint and the spotless interior, not to mention the latest technology and gadgets. But, aside from the aesthetics, a new vehicle has several other advantages.
- Assurance of dependability and guaranteed protection – Most new cars have a strong track record of reliability, and if something goes wrong, the manufacturer’s warranty will most likely cover it. Buying new also eliminates any concerns about how the car has been treated before purchase.
- Complimentary roadside assistance is available – Roadside assistance is included in the purchase of many new autos. This can save you money on coverage because you don’t have to pay for it yourself, as well as a towing price if your car breaks down.
- Updated features – New cars are more likely to fulfill the most recent fuel-efficiency criteria and contain the most advanced safety features.
- Customizability – While you can buy new cars already on the lot, purchasing new also gives you the option of customizing your vehicle. From paint color to features, you can choose exactly what you want your ride to look like and have when you purchase a new car.
- Deals with attractive financing – Many car makers and dealers offer low or no-interest financing if you have good credit. This can make financing a new car less expensive than financing a used one.
Disadvantages of Buying a New Car
Considering the downsides of a brand new car is also vital. Here are some of them.
- An expensive purchase – Buying a new car is costly. The amount of money you borrow with an auto loan will likely be more than what you would borrow with a used car, which will likely result in higher interest payments over time. Aside from interest, a new car will cost you more overall because of higher purchase prices.
- Rapid depreciation – New cars depreciate at a faster rate than used vehicles. After the first few years of ownership, cars can lose around half of their value, and a significant part of that value is lost in the first few seconds after purchase. According to some estimates, cars may depreciate as much as 20% the moment you drive them off the lot.
- Insurers charge higher premiums – The value of new cars is higher, so their insurance costs are higher than those of used models.
Used Car Pros and Cons
Advantages of Buying a Used Car
Used cars, referred to as “pre-owned vehicles” in marketing speak, may lack the allure of new vehicles. They do, however, have several benefits.
- Low prices – Much of a vehicle’s depreciation has already occurred when it reaches the used-car market (and was paid for by the prior owner). As a result, buying a used car allows you to receive more for your money.
- Warranty coverage is available – Some cars now come with 200,000-mile warranties on the most expensive components of the drivetrain. You may also obtain a warranty that goes beyond the original manufacturer’s warranty when you buy a certified pre-owned vehicle from a dealer.
(Tip: Certified pre-owned cars are more expensive than other used cars, but they’ve also been thoroughly inspected and reconditioned as needed.)
- Insurance is cheaper – While you’ll need full insurance coverage for a new vehicle that you’re financing, you might be able to save money on insurance if you buy a used car outright. Insurance overall will also likely be cheaper with a used car because it is less valuable.
Disadvantages of Buying a Used Car
Whether or not the manufacturer’s guarantee still covers them, used cars come with a slew of potentially costly unknowns. Since you don’t know how previously owned vehicles were treated or why they were traded in, you risk buying someone else’s problem. Other issues to consider include:
- Higher mileage – Used cars are more likely to have higher mileage, shortening their lifespan. If you purchase a vehicle with higher mileage, you may find that you need to replace it sooner rather than later or perform a lot of maintenance to keep it running.
- Selection is limited – Finding a used vehicle with the exact options and features you want might be difficult.
- Consumers are less protected – Lemon laws sometimes apply only to vehicles under a specific age and with less than a certain number of miles on the odometer, so you may have fewer options than you would with a new car if you unknowingly buy a vehicle with a ton of issues.
The Sweet Spot: Consider a “Nearly New” Car
Most of us would probably purchase a new car if we could, but budgetary constraints may make that desire unattainable or irresponsible.
Instead, consider having the best of both worlds by purchasing a certified pre-owned car.
A certified pre-owned vehicle is a used car that is factory-certified and can be purchased at a dealership. Typically, these vehicles are accident-free, low-mileage, gently used, and only a few years old.
At first glance, this solution seems to offer the best of both worlds. It provides all the advantages of modern, fuel-efficient, and safe vehicles while also removing a significant portion of the ‘out of the showroom’ depreciation. Plus, the factory certification means that the car should be free of problems and that you’re covered if something happens immediately after purchase.
The disadvantages include not being able to customize your car and paying higher prices for purchase and insurance than you would for an older vehicle. However, the peace of mind that comes with certified pre-owned vehicles may be worth the extra cost.
How to Decide Which Is Right for You
Consider both the initial and recurring costs when deciding whether to buy a new or used vehicle. With any car, you may be liable for paying for the following items:
- Car insurance
- Down payment
- Taxes, title, and fees at closing
- Property tax
- Gas and oil
In terms of repairs, a new car may be less expensive, at least for the first few years. By the time it needs extensive repairs and maintenance, you may be ready to trade it in. Even though you’ll pay more for maintenance on a used vehicle, you’ll pay less upfront and less in interest.
You’ll also want to consider what type of car you want or need, as the type or brand of vehicle you desire will also impact the numbers.
Unless you’re in a rush to buy, it’s a good idea to look at both. Look at what’s available on the used lot and in the new car showroom, compare the price differences, and decide which choice you, and your finances, would be most comfortable with.
Also Read: How Much Can You Afford to Spend on a Car?
Next Steps to Buying a Car
Both new and used automobiles have advantages and disadvantages, and which one you choose may be determined by your personal preferences and financial circumstances. Be sure to shop around for your auto loan if you’re not paying cash. You should compare your options, negotiate the sale price, and ensure that you get the best deal possible. Getting preapproved for a few different loans might also help you receive some estimates and evaluate your possibilities.
The Bottom Line
While there are pros and cons to both new and used cars, the most critical factor is finding the right vehicle within your budget. Do your research before choosing between a new car and a used car to ensure you’re making the right choice for your situation. An automobile should be regarded as a valuable asset, and as such, it’s worth doing the math to ensure that you’re getting the most bang for your buck.