This comparison can help you decide if a new or used car is best for you.
New cars vs. used cars
|New cars: plus & minus||Used cars: plus & minus|
|Minus: higher price
The purchase price of a car is higher when the car is new.
|Plus: lower price
Used cars have a lower purchase price and can be a much better value overall. If you purchase from a private seller with no dealer in the transaction, you’ll probably get a better price — but if the deal turns out to be a bad one, the seller usually will not allow you to return it.
|Minus: instant depreciation
Depreciation is when the value of a car goes down due to wear and tear over time. Almost all cars depreciate. A new car depreciates the minute you buy it – 15% or more. The value can drop hundreds or even thousands of dollars the day you drive it off the car dealer’s lot.
|Plus: declining depreciation
Used cars continue to depreciate, but cars typically depreciate the most during the first 3 years.
|Minus: higher insurance, tax & fees
Insurance, taxes, and registration fees for a car are higher when the car is new. Used cars are generally less expensive to insure.
|Minus: higher loan interest rate?
A loan for a used car may carry a higher interest rate than for a new car. Also, cars more than seven years old might not qualify for financing.
New cars come with a warranty of up to 10 years or 100,000 miles.
|Minus: limited or no warranty
If you purchase from a private seller, your car may not carry a warranty. A dealer may or may not offer you a warranty on a used car.
|Plus: latest features & options
With a new car you can often have the flexibility to order a car with the features and options you want.
|Plus or minus: fewer feature choices
You can’t “order” a used car with the features and options you want, and waiting for the perfect match could take months. But with a used car you may get more features for the money.
|Plus: top condition
A new car should have no previous wear, mechanical problems or body damage.
|Minus: higher maintenance
Before buying a used car: Thoroughly review all maintenance documentation. Inspect the car during daylight hours. Test drive in highway conditions. Consult a service such as Carfax to determine if the car has been in an accident or otherwise damaged. Have a mechanic inspect the car before you pay.
Note: A good middle ground between new and used is a “certified pre-owned” car. These have been checked out by a dealer and come with a warranty.
Will you be a cool customer when it’s time to buy a car?
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