Navigating the Car Market: To Buy New or Used?

Should you buy a new or used car? This is generally the first question facing any car shopper. Thankfully, we’ve got some pros and cons for you to consider.

Car shopping can be challenging, especially when you aren’t sure what you should buy and drive. In today’s market, there are more choices than ever before, especially with the addition and expansion of the electric vehicle market. If you’re torn between buying a vehicle that’s new or looking for a car that’s been on the road for a few years, here are some things to consider.

Used cars offer pricing advantages over new cars

Before we get into the pros and cons of each shopping situation, let’s get the pricing out of the way. The National Automobile Dealers Association states that the average person owns 13 vehicles during a lifetime. Each of these cars averages around $30,000, but in today’s market, that price could be much more. If every vehicle purchased were three years old, most people would save nearly $130,000 by buying used instead of new cars. This could be a difficult figure to get past and might steer you closer to the pre-owned market.

Used cars pros and cons

Pros

The savings compared to new models are often the first positive listed for used cars, but we’ve already gotten that out of the way. Here are a few other reasons to buy used:

• Best car for the money – more value with strong warranties, especially for certified pre-owned cars
• Resale value – depreciation is over, making it easy to get your money back when reselling a used car
• Insurance rates – The lowered value of a used car means insurance rates are less
• Choice – Used cars span all model years prior to the current year, providing a much larger pool of vehicles to choose from

Cons

• Reliability – You don’t know how the previous owner drove the car, and if it’s out of warranty, you might pay for repairs associated with lack of maintenance or poor driving
• Compromise – You can’t order the car the way you want. Finding exactly what you want in the color you want can be daunting

Are there any advantages to buying new cars?

New cars sometimes get a bad rap, especially when talking about value. That said, if you want the latest features, the new style, or just want something that no one else has driven, you’ve got to buy a new car. For those who have spent their lives receiving hand-me-down clothes from older siblings, a new car represents something special.

New cars pros and cons

Pros

• Shopping made much easier – New cars are considered right and come with warranties for any issues you find associated with the vehicle’s build. This means you don’t have to worry about the maintenance records or driving habits of a previous owner.
• More financing options – Automakers often provide rebates and discounts for new cars, which won’t be offered on used vehicles. New car loans typically have better interest rates, which can save thousands of dollars in financing fees.
• Advanced technology – Most new cars have the latest features offered by that automaker. This means you should get the best gas mileage, have lower emissions, and easily connect to the tech features of the vehicle.
• Made to order – If you’re willing to wait for the exact car you want, you can order a new car exactly how you want it. This isn’t possible with a used car.
• New car smell – It’s not just the smell, but that’s an important part of a new car. You won’t have to worry about accidents or other vehicle history items with a new car.
• Maintenance programs – Many new cars come with an included scheduled maintenance package that gets things started the right way.

Cons

• Depreciation – The old saying that “a new car loses half of its value as soon as you drive it off the lot” is close to reality. During the first two or three years of driving, a new car loses most of its value that you’ll never get back. This is how some drivers end up “upside-down” in their car loans, owing more than the car is worth
• Higher costs – Insurance for new cars is much higher than used models because replacement value is higher.

Will you choose a new or used car to drive and enjoy? Each has specific advantages and disadvantages that you should be aware of and consider before making your purchase decision.