Should you buy a new or used car? It depends on your needs and preferences as a buyer, but there are plenty of good vehicles out there either way.
There are some key issues to contemplate before beginning your car-buying journey: If you’re on a tight budget, buying a used car gets you the most vehicle for the money. You can count on one hand the number of new cars with list prices as cheap as $17,000 or lower. For less than half the price of the average new car, you can buy a 3- or 4-year-old used car that is larger and loaded with more features than a small, bare-bones new one. The primary difference in cost between new and used is depreciation: All cars (with few exceptions) lose value over time, but the most dramatic depreciation happens immediately after a car is purchased new, before the new-car smell has faded. From that point it can be sold only as a used car and its resale value reflects the fact.
But buying a used car has its own risks that could cost you over the long run. The fact is, you are buying a vehicle that someone else has owned and driven. You don’t know how it’s been driven or how well it’s been cared for. A used car will almost certainly require maintenance and possibly expensive major repairs sooner than a new one, and those repairs probably won’t be covered by a warranty.
In the end, the decision to buy new or used boils down to what you can afford and what will give you peace of mind.
The Case for Buying New
For some people, buying used isn’t a consideration; they want a brand-spanking-new car. They want to select the color and the features in it. There’s definitely a pride of ownership and peace of mind in being a vehicle’s first owner. Some other advantages include:
- Reduced maintenance expense: A new auto won’t need maintenance for the first several thousand miles, and then only an oil change and tuneup will be required. More manufacturers are covering the cost of those routine maintenance items. The new vehicle likely won’t need new tires, a battery, exhaust system or brakes during its first few years of ownership, or even longer.
- Warranty coverage: The manufacturer covers its new vehicles under warranty for at least three years, and some warranties last much longer. Under a manufacturer’s warranty, if something goes wrong with the car, it’s the responsibility of the dealer and manufacturer to repair it. Typically, these bumper-to-bumper warranties last from three years or 36,000 miles (whichever comes first — an important detail to note) to five years and 60,000 miles. In addition to comprehensive warranties, many automakers provide warranty coverage for powertrains. These often extend past the bumper-to-bumper warranties and are often valid for years longer. Some extend up to 10 years or 100,000 miles. It’s good to be aware of these warranties; if you buy a used car, what’s left of the warranty may (or may not) be fully transferable.
- Safety: Innovations happen so rapidly in the automotive world that just a few model years can mean the difference between having or lacking the most sophisticated safety features — or the best-executed ones. Features that start out as options often become standard over the years, improving their availability on the market. Regardless of the built-in and optional features, automakers improve the fundamental structural crashworthiness of their models with each redesign, so new vehicles they sell today typically protect their occupants better than do five- or 10-year-old versions of the same make and model.
- Mileage: As with safety features, fuel efficiency has improved over time, so new cars trend more efficient than used ones. The mindful shopper can certainly pick a used car with a high mileage rating, but there are more to choose from among new vehicles.
- Peace of mind: If you encounter problems with your new car, you have legal recourse through state lemon laws. If you can prove that your new car is a lemon (definitions differ), you could receive a replacement vehicle or get your money back. Lemon laws apply only to new cars. You also can find out if your vehicle was returned to the used-car market as a lemon by looking at the vehicle’s title or checking out a vehicle history report.
- Roadside assistance: In addition to a comprehensive warranty, virtually all mainstream new cars and light trucks come with some level of free roadside assistance. In addition, some automakers reimburse you or provide alternate transportation if you are stranded far from home.
The Case for Buying Used
If you’re not married to the idea of buying a new car, used vehicles have their own appeal:
- Affordability: The most obvious advantage to used vehicles is that they’re less expensive due to depreciation. Where a consumer can own a larger or more fully featured used car for the same cost as a lesser new car, he or she can also buy a simpler used vehicle on the cheap. Though used cars can be financed just like new ones, the lower price of used cars makes cash payment more feasible for shoppers who don’t want to have a loan payment — or who want to minimize the loan amount and monthly car payments with an initial down payment that represents a greater percentage of the purchase price.
- Just like new: Another trend that makes buying used a better option is the proliferation of certified pre-owned programs, through which car buyers get a late-model used car and an extended warranty. Dealers and third parties may certify vehicles, but factory-certified pre-owned cars from an authorized dealer have the backing of the automaker and are preferred. The CPO idea started with luxury brands such as Lexus and Mercedes-Benz and has become a popular alternative for all brands. A steady stream of off-lease cars in great condition and with limited miles keeps the CPO pool full.
- Improved reliability: Cars have been getting more reliable over the years, so buying used is less of a risk than it used to be. Although used vehicles typically don’t carry the same warranties as new ones, the original factory warranty on a new car is often transferable to a second owner. Concerned buyers can purchase extended warranties from a dealership or third party.
Editor’s note: This story was revised May 24, 2020, with updated information.
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