Should You Buy a Used or New Car?

So, you need a car. Should you go for the shiny new car, though, or the slightly used one? The answer to that depends on many factors.

It’s long been common wisdom that used cars are a better deal. The fact is, new cars lose value as soon as you drive them off the lot, and when you buy a new car you’re having to eat that depreciation right away. A used car, on the other hand, has already depreciated, and if it’s in good shape and well-priced, it can save you money.

Sometimes, however, it makes sense to look at the deals being offered by car companies, since they can make getting a new car more appealing. In some cases, these new cars are actually better deals than used ones. Financing, for instance, is often more attractive for new cars than used ones, particularly in an economic climate when car manufacturers are trying to lure in customers. It’s difficult to beat 0 percent financing deals, and they’re fairly common right now.

As Edmunds.com notes in its recent article Some New Cars Now Cheaper than Used Cars, “because used/certified pre-owned cars are generally financed at a higher rate than new cars, a shopper can actually save money by purchasing a new vehicle instead of a used version in some cases.” It lists examples of typical monthly payments for new and used cars of various models, demonstrating that attractive financing programs can make new car payments competitive with used car ones. And given the benefits of new cars, such as less maintenance and more warranty coverage, they’re often worth the price if the financing puts them on an even playing field with used cars.

The lesson here is that whether to purchase a new or used car depends on your circumstances, the type of car you want to buy, and the economic climate in which you’re buying. 

Whether you decide to go with a used or a new car, it’s important that you do your research into prices, safety ratings and other factors that will affect your decision. Remember, it’s not always best to go with the cheapest possible car, since reliability and safety are values you’ll need to figure in. And the more preparation you do before you make your car purchase, the more money you’ll save, whether you end up going for used or new.