For decades our great nation has been fiercely divided over an all-important debate: should you buy a new or used car?
You’ll find energetic champions on either side of the aisle, defending their preferences for new cars over used cars.
death no exasperation. They believe their path is the only one when it comes to cars. And, as the seasons of presidential debates accelerate, we felt it was appropriate to plunge ourselves head first into this heated debate.
To buy a car is not a decision to be taken lightly, which is why you should exercise caution before making any type of car purchase. Otherwise, you could find yourself wasting thousands of dollars and ending up out in the cold, literally.
How to choose a new or used car
Deciding whether or not to buy a new or used car involves many factors. Rather than making an impulse buy entirely based on emotion, it helps to make a list of important factors to consider that will lead you to the most rational decision possible. A well-researched decision can save you time and money, so here are some things to consider the next time you go shopping.
When it comes to the sticker price, it’s pretty obvious that new cars are much more expensive than used cars. Of course, you have to compare apples to apples. If you pit a new Toyota Corolla against a used Lexus, your results will be skewed. Also, keep in mind that you may need cash for a down payment. The down payment on a new car is going to be significantly more than a down payment on the cheaper used car.
- The verdict: This one is not really a contest. If you compare apples to apples, buying a used car will win over the price every time.
Remember that price and value are two separate things. The price is the amount you actually pay for something. Value is what it is worth, which can make it much more difficult to assess. For example, you can find value in the comfort of a Lexus that you don’t get from a Corolla. So you will get more value buying a used Lexus than you would pay the same price for a new Corolla. You should also always keep “market value” in mind. According to Edmunds.com, on average, the the market value of a new car loses a whopping 11% the second you leave the parking lot. Over a five-year period, your car’s value will drop by 63 percent in total. No matter how much you love your new car, this kind of depreciation can be hard to swallow.
- The verdict: If you are looking to get the most out of a vehicle, choose another for used cars. Whether you’re looking to get more for your money or actual market value, used cars are a clear winner. By letting someone else take the biggest blow of depreciation up front, you can ultimately save money on your purchase.
One of the best things about buying a new car is knowing that you shouldn’t have to do any repairs on it for a while. However, the same cannot always be said for second-hand shopping. Repairs and maintenance of a used car can be expensive. When you buy new you shouldn’t have any problems for a while, and this is usually backed by a hefty warranty. Buying used can be an adventure, and not in a good way. You never really know what problems you may be having.
- The verdict: Mark one for new car enthusiasts everywhere. Of course, it all depends on the make and model of the car you are buying. However, if you are worried about high maintenance costs, rest assured that those costs should be much higher with a new car.
Speaking of warranties, all of the major automakers offer some type of warranty on their vehicles. The advantage of buying new is that you take full advantage of it. Typically, bumper-to-bumper warranties are 3 years / 36,000 miles while powertrain warranties are 5 years / 60,000 miles. Keep in mind that these warranties are choice, meaning they can expire quite quickly if you drive a lot. And, while almost all new cars are covered by a warranty, used cars may or may not.
- The verdict: We will give new cars a very slight advantage here. If you’ve purchased a certified used car, chances are good that the original manufacturer’s warranty has passed to you. However, be aware that these warranties begin on the date of the first purchase, not the model date. Always be sure to clarify whether or not the warranty is transferable when purchasing a used car.
That you are buy a new or used car, the last thing in the world you wanted is to be stranded somewhere on the side of a road. This is where the reliability factor comes in. While you may think that new cars are always more reliable than used cars, this is not always the case. A friend of mine recently bought a new car on the lot and has had nothing but problems since. After about 2 months of hassle, the dealer finally returned his money and let him exchange it for something new.
- The verdict: Again, it’s a slight win to buy new. In theory, new cars should be more reliable, but that totally depends on the individual vehicle. In today’s market, certified pre-owned vehicles can be just as reliable as newer models.
The cost of buying a car doesn’t stop the moment you exit the parking lot. Along with the maintenance and repair costs, you also need to think about how your insurance rates might change. New cars can cost significantly more in insurance premiums over time, with a small monthly increase of $ 50 representing up to $ 600 more per year. Whether you are buying used or new, keep this in mind when negotiating the final price.
When it comes to cars, it’s hard to rule out the vanity factor. I mean, who doesn’t love the smell of a new car? Plus, it’s really cool to do it all in a car that no one else has ever owned. And you can brag to your friends about your new ride, which is always a good time.
- The verdict: If you like that sort of thing, buying a new car may be for you. Of course, you can get most of those same hot fluff if you buy a used car from a dealership lot. So, yeah, let’s call it a push.
It’s your call
Whether you decide to buy a new or used car, the most important factor is that you find the “right” car for you. When purchasing a the used car could make the most financial sense in theory, it certainly won’t save you money if you buy a whole lemon. But that doesn’t mean you have to rush to buy a new car, either. Nowadays, you can find many used cars that are just as reliable as some of the newer models.
It is your decision. Compare the prices. Do your research. Then do your best to make the most rational decision possible.