Buying a car is a big decision – and a big expense. A common question is whether a new car or a used car provides the best value. When it comes to making this decision it really depends on your personal needs and wants, as there are advantages and disadvantages each way. Here is our list of pros and cons for buying new vs. used cars:
Advantages to buying new
When buying a new car you have the luxury to customize your vehicle however you would like; selecting the features, interior and color that you desire.
2. No vehicle history
If you buy a new car, you never have to worry about the vehicle’s history. You know that the car is in factory condition and has never been in an accident or had maintenance issues.
All new cars come with warranty packages, and some even offer free maintenance for a limited period of time. These warranties can save you a lot of money in car repairs and maintenance within the first few years of ownership, which is something to factor into the cost of the vehicle, especially with labor costs for mechanics on the rise
Disadvantages to buying new
The biggest drawback with purchasing a new car is that you will be paying a lot of money for it. Although you can negotiate with the sales person you will still be paying more for a new car than you would for a used vehicle
2. Faster Depreciation
Cars, unlike houses, go down in value as time passes. Some models retain their value better than others, but it is easy to get “upside down” on your car loan, particularly if you finance for 5 years or more.
Advantages to buying used
1. Less expensive
Used cars are a great way to own the vehicle that you’ve always wanted for a discounted price. Used cars are always going to be less than the new model, even if only a year old.
2. Wider Choice
Buying a used car can give you more options when it comes to choosing a car. You may be able to afford certain brands used, that you wouldn’t be able to buy new.
3. Slower depreciation
Used cars also depreciate in value over time, but usually at a much slower pace. This reduces the risk of being “upside down” with your financing.
Disadvantages to buying used
A drawback to buying a used car is that they many times have more maintenance issues, considering the wear and tear they may have. Frequently, they come without warranty, so this work comes out of your pocket. This is something to think about, especially with older used cars. Sometimes the repairs ending up costing you more than the vehicle is worth.
2. Previous ownership
When purchasing a used car it is important to look into the car’s history. The car might have been involved in prior accidents, been subject to a recall, or just had maintenance issues. While services such as CarFax help, buying a used car involves more unknowns than purchasing a new vehicle.