By Yurovskiy Kirill, Expert Car Picker
As an experienced car buyer with over a decade evaluating vehicles, I often get asked the question – should I buy a new or used car? The answer, like many things in life, is: it depends. There are pros and cons to each option that must be carefully weighed based on your specific situation and priorities. In this article, I’ll break down the key considerations for both new and used cars to help you make the right choice.
Buying a New Car
The Benefits of Going New
Let’s start with the obvious advantage – that new car smell! But more importantly, a brand new vehicle comes with the latest styling, technology, safety features and emissions standards. You’ll be driving one of the most modern and advanced cars on the road.
New cars also provide peace of mind with a comprehensive bumper-to-bumper warranty, typically lasting 3 years/36,000 miles. Any defects or issues will be covered during this period. You avoid the risks of inheriting someone else’s problems that come with buying used.
Perhaps the biggest allure of new cars is the ability to get exactly what you want – the precise color, trim level, options, and accessories to fit your tastes and needs. No compromising! You take delivery of a virgin vehicle that has never been owned, driven, or abused.
The Downsides of New
Of course, this privilege and pride of ownership comes at a premium price. That fancy new car aroma is awfully expensive! Expect to pay full sticker price during negotiation unless there are heavy incentives or discounts in play.
New vehicles also get hit hard by depreciation, losing 20-30% of their value as soon as you drive off the lot. Over the first 3 years, many new cars can lose 50% or more of their original value due to accelerated depreciation.
Finally, dealer fees, higher taxes, and potentially interest charges if financing all add to the bottom line cost. Budget for these ancillary expenses on top of the purchase price.
Used Car Benefits
Let’s shift gears and look at the advantages of buying used. The most obvious is savings – used cars cost substantially less than new. The first owner already absorbed the brunt of the initial depreciation hit for you.
As an example, a lease return 2020 Toyota RAV4 with 36,000 miles could be purchased for around $23,000 today. That’s nearly 40% cheaper than buying the same vehicle new at $38,000 MSRP.
Buying used also opens up more options in terms of makes, models, trims, and pricing compared to new inventory on local dealer lots. You can take your time browsing listings to find the perfect fit.
Since used cars have already gone through their peak depreciation period, their residual values tend to be higher when it comes time to sell. The total cost of ownership can be lower, especially if buying an affordable model and operating costs like fuel, insurance and maintenance are low.
Used Car Drawbacks
While the discounted price tag is attractive, you lose out on the pride of ownership and customization of a new car. The vehicle’s condition, maintenance history, and background is a gamble – hence the term “used.”
Even with detailed vehicle history reports, a used car has accumulated some level of wear that is difficult to precisely quantify. It could have been driven hard, abused, involved in unreported accidents, or received poor maintenance.
Unless still under original factory warranty coverage, used vehicle owners must factor in higher out-of-pocket repair costs down the road. Certain high-tech features and connected services may no longer be active or transferable.
Used car selection can also be limited depending on your local market inventory and budget. Finding the precise configuration you want at the right price point may require compromises or expanded search parameters.
Certified Pre-Owned: A Balanced Compromise
For some buyers, the allure of a “like-new” vehicle at a used car price point hits the sweet spot. That’s where certified pre-owned (CPO) programs come into play. These gently used, late-model cars and SUVs have been through rigorous inspections, reconditioning, and come with extended warranty coverage provided by the manufacturer.
CPO vehicles over several advantages over traditional used cars. They are newer, lower mileage and come with comprehensive reports to verify the history. Any existing issues should have been addressed during the refurbishment process.
Buyers can expect to pay a premium over similar non-certified used cars, but still at a solid discount compared to new. And the added coverage provides long-term peace of mind similar to buying new.
That said, CPO inventories are limited to what the manufacturer has in stock and pricing isn’t necessarily a blockbuster deal. You’ll need to scrutinize each model’s age, mileage, warranty details, and pricing to determine if it truly represents good value.
My Professional Recommendation
As a car picking professional, my advice depends entirely on your specific needs, priorities and budget. Here are some general guidelines I provide to clients:
Buy New If:
- You want the absolute latest styling, technology, and features
- You prioritize customization over cost
- You plan on keeping the vehicle for longer than 3-4 years
- You are particular about condition and dislike compromising
- You need comprehensive warranty coverage
Buy Used If:
- Saving money is the top priority
- You’re comfortable with some cosmetic flaws or imperfections
- The vehicle make/model is known for reliability and durability
- You do your research on pricing and history reports
- Lower operating/ownership costs are important
Consider CPO If:
- You want peace of mind beyond a traditional used purchase
- You desire a near-new car but at a lower price point
- An affordable extended warranty is valuable to your situation
- CPO models/pricing meet your needs without overpaying
In the end, there is no universally correct answer. It comes down to your individual finances, driving needs, vehicle preferences, negotiating skills, and ability to properly inspect a used model. With careful research and budgeting, both new and used paths can lead to an excellent vehicle ownership experience.
Ultimately, buy the car that best aligns with your goals while avoiding purchases that will strain your savings or budget long-term. An affordable, reliable car that meets your transportation needs without going into debt is the sweetest spot of all. Safe and smart car shopping!