New vs. Used: Which Type of Car Offers the Best Value?
Some car buyers believe that new cars are the best option, while others will only buy used vehicles. When considering whether to purchase new or used, buyers should weigh their options in the following categories.
- Price. Buyers should calculate the total price and monthly payment for new and used cars. Buyers will typically pay more for a new car, but sometimes the price difference isn’t enough to warrant buying a used model.
- Down payment. Without a down payment, the buyer of a new car will owe interest on the entire amount of the vehicle, so it’s wise, but not required, to make a down payment. The down payment and interest rate on a used car are typically lower.
- Depreciation. Some vehicles lose as much as 40 percent of their value during their first year, so drivers of new vehicles are hit hard with depreciation. Buyers of used cars can get a great value vehicle while avoiding being hit with that immediate decrease in value.
- Features. New cars usually offer up-to-date features and technology, like Bluetooth capability and navigation systems. Drivers who value these features are better off picking new models; drivers who don’t need all the bells and whistles may be better off considering a used car.
- Reliability & Maintenance. New cars are most reliable and typically include a warranty to cover parts and sometimes services for a specific amount of time or mileage, so new car drivers don’t have to worry about expensive repairs. The tradeoff, of course, is the higher upfront cost for a new car.
- Insurance. The cost of insurance for a new vehicle will always be more than a used one, so drivers should factor this into the total price of the vehicle.
New and used cars each offer advantages and disadvantages. It’s up to each driver to decide which vehicle offers the most value based on his or her needs and budget.