If you were to take a poll of people on the streets of Any Town, USA, and ask them whether they prefer to buy a new vs. used car, you’re going to find that your answers are all over the place. Often times, people have strong opinions one way or the other, but the truth is that it often comes down to what you need for where you are currently at in life. In general, though, there are pros and cons to each and in order to figure out what’s best for you. Let’s take a look at new vs. used cars pros and cons, and how you should ultimately make your decision.
Pros of Buying a New Car
Who doesn’t love that new car smell? When is someone going to make a candle that smells like that? In all seriousness, though, there are advantages that come with that new warranty. As this article by TheBalance.com notes, “Most new cars will have very few repairs in the first few years, so you can focus only on the maintenance of the car.” This is a pretty big advantage, as getting car repairs taken care of is universally loathed.
Dealers also may very well lower interest rates on new cars, and this will help you pay less interest over the life of your car loan. Of course, you’ll often pay more for a new car, too.
If having the latest technology is important to you, going with a new car could be the best option. You can often synch your phone and other devices more easily, and newer cars often come with the “bells and whistles” like navigation, infotainment systems, heated seats, and more.
Also, if you have good credit, a manufacturer might even cover the down payment as an incentive.
Lastly, there are more hybrid options in newer cars, so you are more likely to be able to get a new vehicle that gets better gas mileage and puts off lower emissions.
Cons of Buying a New Car
The biggest and most widely considered con of buying a new car is that it isn’t the best of investments. In fact, you lose money on it as soon as you drive off the lot, with its biggest depreciation in the first 2-3 years of car ownership. Unlike with home ownership, your money isn’t gaining equity. As this AutoTrader.com article notes, “On average, a new car loses between 20 and 30 percent of its value the moment it rolls off the dealer’s lot. Some cars can depreciate up to 50 percent in the first three years.”
Some will also tell you that a disadvantage of buying a new car is that you may find something defective in this new model, such as the engine. The company will alter the design of that model for the next year, but you’re still stuck with that car. With a used car, you can do the research on it and they will know whether or not there are issues.
Pros of Buying a Used Car
First and foremost, the pro that motivates most people is simply that used cars often cost less. If you’ve always wanted a luxury car but don’t think you can afford the sticker price of a new one, try searching the Internet for something like a “used Audi near me.” The lower price goes hand in hand with the fact that cars’ values don’t appreciate over time. And when you consider the lower insurance premiums, you’ll get even more savings.
Another way you’ll save with a used car is that many states don’t make you pay sales tax on a used car at all, particularly if you buy from a private seller. On the other hand, the sales tax on new cars can add up to thousands of dollars.
If you do your due diligence, you can find a pre-owned car in great condition. Many people assume used cars have been ridden into the ground. As long as you check the accident history and find a car with low mileage, you could very well be getting a steal.
Cons of Buying a Used Car
The biggest con of getting a used car is the lack of warranty, so you won’t have this in the case of needed repairs. You can protect yourself against this by getting an extended warranty and/or shopping for a car that is a certified pre-owned vehicle.
With the case of a used car, you also risk buying something that was formerly someone else’s problem. You can avoid this by going to a reputable dealer, having the car inspected, and running an accident report on it.
You also might not get the updated technology or even the type of car that you want, as there won’t be as wide of a selection for used cars.
As with all things, it’s simply a matter of sitting down and weighing the pros and the cons and how they relate to your life. Go forth and buy used or new—it’s up to you!