Should I buy a New or Used Car?
Whether it’s better for you to buy new or used depends on many factors: personal choice, budget, creditworthiness, length of time you’ll own the car, how you’ll use it and the type of vehicle you’re interested in.
Here are some of the pros and cons of buying new or used:
New Car Pros
This one’s simple: new vehicles with little to no miles on them won’t (or shouldn’t) have any issues for a long time. Generally speaking, the same can’t be said for used vehicles.
In addition to the lack of miles, most new vehicles come with a full warranty. They vary from automaker to automaker, but the good ones can reach ten years or 100,000 miles — whichever comes first. Just make sure you know whether it's a powertrain warranty or a complete bumper-to-bumper warranty. While you can get warranties on used vehicles, they’re usually not as comprehensive as when new.
Regardless of your credit history, it’s usually easier to secure financing from banks and credit unions – and at lower interest rates – when you are purchasing a brand-new car. Some lenders may even refuse to offer loans for older vehicles altogether, particularly if they’re over six years old.
Deals and Incentives
Manufacturers frequently offer perks such as cash back, zero down payment, and zero-percent interest to qualified new-car buyers, and these can significantly diminish your total up-front and/or monthly outlay. There are also tax credits and incentives for purchasing electric vehicles which are only applicable to new automobiles, so a used EV would not qualify.
Much like tech outside of vehicles, the tech inside vehicles is advancing every year. This includes infotainment systems, wireless Apple CarPlay and Android Auto connectivity, wireless charging, Bluetooth, panoramic moonroof, LED lighting inside and out, near-field connectivity, digital display screens, navigation systems, satellite radio, touchscreen entertainment systems, audio systems. Unlike used vehicles, buying new is the only way to get items like these.
Similar to the latest tech, new vehicles will have the latest safety features and will be built to the latest safety standards — standards and features which advance every year. Components include adaptive cruise control, pre-collision braking with pedestrian and cyclist detection, night-vision screens, laser headlights that bend around other vehicles, lane-departure warning, lane-keep assist. Government and third-party safety tests and ratings also get more rigorous each year and hold automakers to increasingly stringent crash and rollover protection levels.
While it’s true that new vehicles don't necessarily get better fuel economy than used models simply because they're new, technology is constantly pushing the efficiency envelope further each year. Hybrids, plug-in hybrids, mild hybrids, electric vehicles and hydrogen fuel-cell vehicles are all getting cleaner, more efficient and less expensive. Even gas engines are steadily getting greener every year using better fuel injection technology, cylinder deactivation and turbo- and supercharging and through the use of better, greener transmissions.
Free From Damage
Unless you’re buying a “scratch-and-dent” new vehicle from a lot which was recently hit by a hailstorm, you don’t have to worry about any damage or wear and tear with a new vehicle. You also don’t have to consider prior accident history or fix a (possibly cascading) array of problems that can result from a previous owner's neglect.
Availability of leasing
While it's possible to lease used cars, it's far more common to lease a new vehicle. This can be a nice payment option if you want more car for your monthly payment than you could afford if you took out a loan and if you don't mind not owning the vehicle at the end of the lease.
New Car Cons
In most cases, if you finance it, you will pay a great deal more per month to buy a brand-new car than you would to buy the same vehicle that's even a year old with very few miles. It will also cost more to register a new car and you’ll pay more in sales tax. Plus, insurance rates will be substantially higher too, since they are based in part upon the amount the insurance company will have to pay out if your car should ever be stolen or totaled.
Anxiety or Stress
Owning a brand-new car can make you constantly worried about dings and dents or curbing your wheels when you park or countless other wear-and-tear issues. If you buy used, maybe you stress about this less.
Used Car Pros
This is an easy one; used cars are usually cheaper (unless it’s an older classic car). Here’s a look at the many ways they’re cheaper:
Cheaper to buy
Used vehicles don’t suffer from the dreaded depreciation that new cars do. This means you get more bang for your buck when you buy and you stand to recoup more of your money when you turn around and sell the vehicle.
Cheaper to borrow
In some cases, banks or lenders will give you a better interest rate on a used vehicle loan than they might on a new vehicle because they know there’s far less depreciation to worry about on the used vehicle. There is a limit to this however, as many lenders won’t offer car loans on used vehicles that are beyond a certain age.
Cheaper to insure
Used vehicles are worth less than new vehicles, so they’re cheaper to insure. This saves you even more money each month.
Cheaper to buy
Registration fees, sales taxes and other fees are often all cheaper on used vehicles than they are on new vehicles. This can add up to significant savings over the lifetime of the used vehicle you buy.
When shopping for a certain generation of a used vehicle, you often have several model years and variations to choose from. If you’re very picky or if a particular color or option was only available for certain years, you’ll have an easier time finding it on the used car marketplace.
It’s not that used vehicles are inherently more reliable than new ones (sometimes it’s the opposite) but there’s much more data and consumer advice on which used vehicles are reliable and which are not. Many new vehicles with the latest engines or transmissions or electronics also have unknown reliability ratings until they’ve been on the market for several years. This gives the used buyer an advantage.