Buying A Used Vs. New Car

By Product Expert | Posted in Financing on Friday, April 8th, 2016 at 4:03 pm
buying a used vs new car

Is buying a new car worth it, or is it smarter to buy used? As with every big decision, there’s no one-size-fits-all answer. Used cars are less expensive up front, but they can come with their own hidden costs. If you’re trying to decide between buying a used vs. new car, here’s what you should consider first.

Pros and Cons of Buying a Used Car

Pros:

  • Lower sticker price – If you have a specific model in mind, the base price will always be lower on a used car. If you’re deciding based on what monthly payment you can afford, buying used will get you a nicer car. It’s that simple.
  • Less depreciation – The value of a new car depreciates most in the first year. When you buy used, the previous owner has already taken that initial hit. So, when it comes time to trade in a car you bought used, you’re taking a much smaller loss.
  • Cheaper insurance – Used cars tend to be cheaper to insure than new ones.

Cons:

  • Higher maintenance and repair costs – A used car will need more maintenance and repairs sooner. These costs can add up fast, especially if the manufacturer’s warranty has already expired.
  • Fewer features – In-car technology evolves quickly, so buying a used car means missing out on new features like Apple CarPlay.
  • Fewer choices – If you’re looking for a specific color or option package, you’ll have to look much harder when you’re shopping used.

buying a used vs. new car

Pros and Cons of Buying a New Car

Pros:

  • Better financing deals – Financing a new car will generally get you a lower interest rate than financing a used car. With good credit, you’ll also be able to take advantage of various new-car incentives and zero-down-payment deals.
  • Save on maintenance – We offer free service for the first year with any new car purchased. Add in the manufacturer’s warranty, and you’ll end up spending very little on maintenance and repairs for the first few years.
  • Better features – Buying a new car means you’ll get to enjoy all the latest technology.
  • More choices – Because we have more of them in stock, it’s easier to find a new car with exactly the right combination of options. If you’re patient, you can even pre-order your perfect car.
  • Perfect condition – no used car will ever be quite so shiny.

Cons:

  • Higher sticker price – Again, pretty self-explanatory.
  • More depreciation – A hidden cost that won’t be felt until trade-in time. New cars lose value quickly, so you’ll be taking a bigger loss when you re-sell the car later on.
  • Higher insurance rates – New cars are generally more expensive to insure than used cars.

buying a used vs. new car

More Finance Tips: Should You Lease A New Car? 

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