Find the Answer to the Question, “Should You Buy a New or Used Car?”

When shopping for a car, there are a number of decisions you have to make. One of the first and most important choices is whether to buy a new or used car.

Brand-new cars are usually more expensive than used cars, but they tend to have fewer mechanical issues. And even if they do break down, repair costs are often covered by the factory warranty.

Used vehicles, on the other hand, are often much less expensive than new cars. While used cars typically have some wear and tear and a higher mileage, buying used can be a smarter financial decision for people on a budget.

If you’re deciding between a new and used car, it’s important to consider your unique needs and weigh the pros and cons of each option.

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Pros of Buying a New Car

Many drivers like the idea of buying a brand-new car. They have the latest safety features and technology and are in pristine condition inside and out. Here are some of the biggest advantages of buying a new car:

New cars have the newest features

As automotive technology advances, cars are becoming more and more useful for drivers. Nowadays, new cars have innovative computer technology that makes the driving experience safer and more enjoyable.

For example, many new cars have driver assistance features that alert you to potential obstacles around your car, and some features even stop your car automatically to avoid a collision. Of course, you can also use voice commands to make calls, send text messages, navigate, and do a million other things, all while on the go.

You may be eligible for a great financing offer

As an incentive for buying a new car, it’s common for dealerships to offer special discounts and financing deals. These may involve cash back or 0 percent financing, making the vehicle a more affordable option.

New cars might have a better warranty

New cars are less likely to break down than used ones and most new cars come with a factory warranty. Most new car warranties are bumper-to-bumper warranties, meaning most common repair costs are covered. You may also get free roadside assistance with your purchase.

You can customize the vehicle

When you're shopping for a new car, you often have the option to choose the color, upholstery, accessories, trim level, and other features of the vehicle. You can also upgrade certain technological features of the car.

Cons of Buying a New Car

Despite all the benefits of buying a new car, there are also some downsides you should consider. Here are some disadvantages of buying a brand-new car:

It’s more expensive

In most cases, new cars are more expensive than used cars. If you’re on a tight budget, a new car might not be in the cards. And even if you can afford a brand-new car, you’ll need to decide if a new car is worth the high cost.

You will pay more in sales tax

Because new cars are usually higher in price than used cars, you'll also be responsible for paying hefty sales taxes on your purchase. The only exception is if you live in a state that doesn’t have sales tax.

New cars often depreciate at a faster rate

Data shows that new cars can lose up to 20 percent of their value within the first year of ownership. If you plan to sell your car later on, you might not be able to sell it for enough to cover what you owe on the loan. You can avoid this with a used car because most of the depreciation has already occurred by the time you buy it.

Pros of Buying a Used Car

Buying a used car can be an excellent financial decision for many drivers, even if you’re looking for a luxury model. Below are some of the advantages of purchasing a used vehicle:

Used cars are cheaper than new cars

The biggest benefit of buying a used car is that it’s usually cheaper, especially if you have your heart set on a particular model.