While a new car may come with the latest and greatest in technology, options and warranties, an older model can have its benefits, too. Weigh the pros and cons of each to make a decision that’s most practical for your life and your budget.
A new car doesn’t just smell good, it carries comprehensive warranties that many used cars don’t. This means if it breaks down soon after you buy it, you’re usually covered for repair costs. New cars also offer more advanced safety features than used vehicles, as well as newer technology that can make the car safer and more pleasurable to drive.
Certified pre-owned vehicle programs may offer more new car perks for used car prices.
Some new car warranties have limitations and may be predicated on certain types of maintenance. Read your warranty carefully so you know what’s covered and what isn’t.
A new car will cost more than a comparable used make and model. It also will cost more to insure a new car than an older one, especially if you’re financing it. You’ll also pay more in personal property taxes if you have a new car versus an older model. On the other hand, a used vehicle can cost more to maintain, may be subject to age-related repairs and might not be as fuel-efficient as a newer model.
You’re more likely to get a lower, more competitive interest rate on a new car loan than you will with used car financing.
Used cars don’t usually qualify for special financing or cash-back rebates, which many new car buyers use as a down-payment. When you buy a used car, you’ll typically need to have a trade-in or the ability to put cash down.
Don’t just look at the model year of a used car -- consider the mileage, the number of previous owners and the wear-and-tear on the vehicle.
There's always room for negotiation, whether you're buying new or used. Dealers typically have more wiggle room in the price of used cars than they do on new ones. Not only is price something to haggle over, but warranty terms are negotiable, as are trade-in values. Don't leave these key factors out of the negotiation process.
Don't be afraid to walk away if the deal doesn't meet your needs.
A new car depreciates the minute your drive it off the lot. If you plan to drive it for many years, this isn’t a big deal, but if you’re someone who trades in vehicles regularly, it might not be the most cost-efficient move. You’re likely better served buying a slightly used vehicle in the first place.
Use a service like CARFAX to check the history of any used car you're considering. It's also worthwhile to have a mechanic inspect it for damage, undisclosed repairs or potential red flags.
