Chapter 3. Consider New vs. Used
The age-old conundrum: should you go for the shiny new wheels or roll the dice with a pre-loved chariot? It's like choosing between a gourmet feast and a mystery meat buffet—you never know what you're going to get, but one will definitely cost you more.
So, you fancy yourself a trendsetter who's always gotta have the latest bells and whistles, even if it means selling a kidney to afford it? Well, a brand-spankin' new car might just be your ticket to automotive paradise. Sure, it'll cost you an arm and a leg, but think of all the street cred you'll earn with those fancy features and sleek style. Plus, if you're in it for the long haul (we're talking four to five years of commitment), a new car gives you the ultimate power—full control over every oil change, tire rotation, and coffee spill from day one.
But if you're more of a bargain hunter or just enjoy the thrill of a good deal, a used car could be your knight in slightly dented armor. Sure, it's had a few owners and maybe a bump or two along the way, but think of it as adding character. And let's not forget about the magical world of certified pre-owned (CPO) cars—like the Goldilocks of the automotive world, with all the perks of a new ride and the peace of mind of a thorough inspection and warranty.
Buying a New Car
Pros
- Get the most possible life out of the car.
- Full control over maintenance from day one.
- Finance the purchase over a longer period, reducing the monthly payments.
- Attactive financing and/or incentives, with interest rates lower than used cars.
- Better warranties and additional perks such as roadside assistance and free services.
- Get the latest safety, technology, comfort & convenience, styling and fuel efficiency features.
- Choose the specific make, model, color, and features you want, or order one and customize it to your liking.
Cons
- More expensive than used cars.
- Usually higher insurance costs than used cars.
- Depreciates quickly in the first few years, typically 20-30%, especially for large and luxurious vehicles. Here are a few websites with some guidance:
- CarEdge www.caredge.com/ranks/depreciation
- Kelley Blue Book www.kbb.com/awards/best-resale-value-cars-trucks-suvs
Buying a Used Car
Pros
- Less expensive than new cars.
- Many dealerships offer certied pre-owned cars (CPO) that have undergone thorough inspections and include extended warranties.
- Have already experience the large depreciation since new, so they will not lose value as quickly.
- Insurance premiums are typically lower. And if the car is below a certain value and is not nanced, you may choose to eliminate the collision and comprehensive coverages which are the most expensive policy elements.
- You may be able to get a higher-end model for the same price as a basic new car; see the depreciation article link above for examples of great deal.
- You can get a good idea of the car's reliability and potential issues since professional and consumer reviews and vehicle history such as depreciation and frequency of repair are readily available.
- You may be able to find a car with low mileage that is still in great condition.
- Can be just as reliable as a new car, especially if they are well-maintained and have low mileage.
- You can find a nice, reliable car in good shape for a relatively low cost and set aside cash each month for maintenance and repairs if they're needed, and if not, pocket the money.
Cons
- Usually have more mechanical and cosmetic issues than new cars.
- Need to pay for repairs out of pocket unless you buy a CPO car or an extended warranty.
- May not have the latest safety, technology, comfort & convenience, styling and fuel efficiency features.
- Interest rates are higher than for new cars.
Whether you choose or lean toward new or used, as you work through a new or used checklist it would be good to look at the alternative. For example, if you choose used, depending on current market conditions, check pricing for similar new cars as manufacturers incentives, seasonal discounts, lower interests rates, or longer repayment terms may make buying new the better option, especially if you plan to keep the car longer than normal.
