Skip the auto shop - Our mechanics make house calls

What Are the Pros and Cons of Buying a New or a Used Vehicle?

new or used car

Signing the dotted line at the car dealership to close a transaction on a brand new car is one of the most important and exciting decisions a car owner will make. The allure of owning a vehicle that nobody has driven and that fits your needs perfectly is exciting. On the other hand, your practical side says that maybe a used car is the better way to go - especially when it comes down to dollars and common sense. In order to make an informed decision, it's a good idea to understand the pros and cons of buying a new or used vehicle.

According to a poll taken by people who’ve owned a car for 10 years, the decision of which car to buy is a big one that has long-lasting impact. It pays to do lots of research and think the options through.

Understanding the Benefits of Buying a New Car

One of the best reasons to buy a new car is the manufacturer’s warranty it comes with. You’re likely to enjoy a few years of trouble-free ownership and if something does go wrong, you don’t have to pay to get it fixed. Many dealerships offer 3 years/36,000 mile warranties, while some extend it to 5 years/100,000 miles to give you added peace of mind. Different dealers and brands are willing to include other extras in the warranty to sweeten the deal.

New cars offer the latest technology, which enhances your safety and offers the ultimate convenience. Imagine not having to hunt for your keys when you want to get inside or start your car. With a push-button start, you are ready to go as long as you have your keys with you. Advanced airbags and driver-assist features make every drive safer. Those are just some of the advanced features that come with new models – and they'll continue to improve.

The ability to customize is also appealing to many car buyers. Choose your favorite paint color and wheels, even add packages with bonus features to make every drive more enjoyable. All of those add-ons make spending more time out on the highway a pleasure and not just a requirement of your day.

The lure of 0% financing may win over your practical nature. Anytime you can get a better APR or finance terms, it will put a smile on your face. It’s common to see car loans of four to seven years, which often reduce your monthly payments, though it will increase the amount of money you pay in interest overall.

Understanding the Cons of Buying a New Car

Depreciation is one of the big reasons people choose to stay away from new cars. Drive off the lot, and your car isn’t worth what it was when you were looking at it two minutes earlier. This sounds extreme, but you lose 9% of the value of your car just be driving away from the dealership. By the first year, you’ve accumulated almost 20% in depreciation.

The cost of owning a new model doesn’t end there. Your sales tax will be higher as well, which is tied into the price of the vehicle. Because the tax is figured at a percentage, it goes up with a more expensive purchase. All but five states charge a sales tax on vehicles (Alaska, Delaware, Montana, New Hampshire, Oregon), but each state varies.

Auto insurance is also often more expensive with a new vehicle because replacement cost is higher. Repairs are more expensive because OEM parts are used instead of aftermarket parts.

Being Practical with Used

Used or pre-owned vehicles offer many advantages to appeal to your practical nature and budget. However, you want to look at both the advantages and disadvantages before you decide.

Consider the Benefits of Buying a Previously Owned Vehicle

One of the biggest draws towards used cars is the fact you aren’t paying for initial depreciation. Buy a car that is one year old and you already have at least a 20% less depreciation to account for than if you’d bought that same vehicle when it was new. What this means is you can purchase that stylish sedan or crossover you’ve had your eye on but couldn’t afford when it was sitting in the showroom. As a pre-owned model, it’s no longer out of your price range.

Choose a late model with low mileage or certified pre-owned and you’ll likely get a warranty with the vehicle. For instance, if you buy a car that’s two or three years old and only has 40,000 miles on it with a 100,000-mile warranty, you’ll enjoy ownership for at least a few years without repairs.

A lower price tag means savings in other areas, too. If you choose to buy a less expensive used car, sales tax is cheaper and insurance is less expensive because the vehicle has a reduced value for replacement. You can find a wide range of models at a variety of price points, which means you can select a used vehicle that fits your budget, even if it’s only a few thousand.

Understand the Negative of Used Car Purchasing

The concern for many with used vehicles is the stigma of buying a car that is ready to fall apart. You may not have a maintenance history on the vehicle or know why it was traded in. Even if the vehicle is in perfect running condition, more than likely you’ll have to start making repairs sooner than you would with a new model. Make sure you have money saved back for new tires, belts, hoses, and other components that need replacement as the miles add up.

The lack of a warranty can deter many from choosing a used vehicle. If you want that peace of mind, you’ll have to purchase an extended warranty, which can cost from $1000 to $2000 on average vehicles or several thousand for high-end models.

Expect to pay a higher APR on a used vehicle because of the higher level of risk. The difference between new and used for interest rates can vary from .20 to over 1%, depending on the area you live in.

If you’re trying to decide between a new and used vehicle, remember that no answer is perfect. Do your research to find a vehicle that fits your needs and is a good deal, whether it is new or used. Always get a pre-purchase inspection from YourMechanic on any used car you're interested in to get a better idea of the condition it's in.

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details
Icon-warranty_badge-02

Skip the repair shop, our top-rated mechanics come to you.

At your home or office

Choose from 600+ repair, maintenance & diagnostic services. Our top-rated mechanics bring all parts & tools to your location.

Fair & transparent pricing

See labor & parts costs upfront, so you can book with confidence.

12-month, 12,000-mile warranty

Our services are backed by a 12-month, 12,000-mile warranty for your peace of mind.

Get A Quote

Need Help With Your Car?

Our certified mobile mechanics make house calls in over 2,000 U.S. cities. Fast, free online quotes for your car repair.

GET A QUOTE

More related articles

P0052 OBD-II Trouble Code: HO2S Heater Control Circuit High (Bank 2 Sensor 1)
P0052 code definition HO2S Heater Control Circuit High (Bank 2 Sensor 1) What the...
Insurance Requirements for Car Registration in Kentucky
The Kentucky Transportation Cabinet requires that all drivers in Kentucky carry liability automotive insurance, or “financial responsibility” in order to operate a vehicle legally and maintain vehicle...
The Traveler’s Guide to Driving in Malaysia
CraigBurrows / Shutterstock.com Malaysia is a popular destination for many tourists today. The country has amazing sights and attractions that you will want to explore....


Related questions

Q: whether to buy a new car

Whether to replace a car, even one that has been giving you trouble, is always a hard decision. But when everything is going well, it can even seem foolish. At 141,000 though, anything can happen on any car no matter...

Q: Loud squealing sound - 2014 Toyota Tacoma

Hello. Your description sounds like a clutch release bearing - aka throwout bearing. With only 30,000 miles, you might want to check in with Toyota. I don't know if they would consider it part of their powertrain warranty or if...

Q: Spike in costs around 120,000 miles?

Hi there. Your question of what to expect in service costs is difficult to answer. There are variables involved, whether the vehicle was driven hard by the previous owner(s), or whether the vehicle has had maintenance performed at the recommended...