Key Takeaways
Should I buy a new or used car? Is it better to buy a new or used car? These questions come to mind when we plan to buy a car. Of course, price is one important factor influencing buying a new or used car. But is that the only factor? No, you need to consider others too before deciding on one!
Cars and trucks are very expensive for people to purchase. The expense of transportation, including fuel and vehicles, accounts for around 16% of the average American's total spending. Driving a new car typically costs around $677 per month, compared to $525 for used cars. Unfortunately, a new and used car's average price has risen rapidly in the past two years.
So, you need to make a wise choice! A used car is smart if you want to save money on your initial buying. However, you must consider the total ownership cost, including maintenance and repairs. So from a financial viewpoint, buying a new car is always preferable. On the other hand, many others are open to either choice but are curious about the advantages and drawbacks of buying a new car instead of a used one.
So, should you buy a used or new car? Keep reading our review to decide without much hassle!
Should I buy a new or used car? Used cars typically cost less than brand-new cars. But over the past five years, both prices have substantially surged. On average, the monthly payment for a new car has increased by 18.5%, from $564 in 2019 to $677 in 2022. Also, the average price of used cars increased considerably, from $401 to $525, a change of 27.4%.
For instance, we can consider the cost of a new and used Honda Accord.
| Category | New 2022 Honda Accord EX-L | Used 2017 Honda Accord EX-L |
|---|---|---|
| Ideal listing price | $35,338 | $22,895 |
| Estimated monthly payment | $668 | $449 |
| The assessed first year of ownership maintenance costs | $140 | $1,371 |
Price should not be your sole deciding factor when buying a new or used car. Along with these factors, consider the car's reliability, depreciation, safety features, and personal preferences.
What does that mean? A new car is a current-model-year vehicle that has never been titled, usually with very few kilometers on the odometer. So instead, a nearly new vehicle is used but titled a pre-owned automobile of the prior model year.
The models you consider should belong to the same generation to prevent comparisons from becoming muddled. The benefits get reduced when the new car is the first of its generation and the competing model is based on an older platform. So, the used car will lack modern technologies and have a distinctive appearance.
Another factor to consider is whether I should buy a new or used car is its depreciation value. As soon as a car leaves the dealers lot, its value immediately drops. Vehicle depreciation is significant, even though the timeframe of it might be an overstatement. With the largest amounts of depreciation occurring in the first 1-2 years of ownership, it is typically a car owner's largest expense during the first few years.
For instance, let's consider the Honda Civic car. A brand-new Civic EX variant had an average transaction price of about $23,500 in 2018. On the other hand, a used 2017 EX with the same features costs around $21,500 at retail. So even with 12,000-15,000 miles on the odometer, it would still be covered by the remaining manufacturing guarantee, saving you roughly $2000.
The used car you buy will be one model year older than the new car you are also considering. That fact will result in a reduced trade-in value when the time comes to get another new car. However, the factor becomes less of an issue the longer you hold the car.
Should I buy a new or used car? Okay, I,ll go with a brand-new one! But, if it is what you decide, you must know the pros and cons of buying one!
One thing that distinguishes a new car from an old one is that it will have many new features.
Buying a new car can drain your wallet. Here are some cons you need to know about buying a new car!
Always check out seasonal deals if you're buying a new car. You can cut some upfront costs by carefully planning your car purchase and looking around for auto loans.
Used cars often cost less and depreciate value more slowly, but there may be some drawbacks you must look out for.
If you buy a used car, you could spend less on monthly payments, insurance, and other expenses. Additionally, depreciation will probably happen slowly. These are some of the pros of buying a new car.
Suppose you decide to purchase a used car. In that case, you may need to modify your list of requirements for your future car, look into the car's past, and spend extra money on maintenance. These are some cons of used cars.
A used car is ideal if you want to save money on your initial purchase. However, you must consider the total ownership cost, which includes maintenance and repairs.
Are you planning to purchase a used car? Of course, but are you not convinced about the car's history? Then the ideal choice will be a certified pre-owned car. A pre-owned car is a used car that has passed a thorough inspection by the manufacturer or dealership. In terms of the maintenance cost, these cars fall between used and new cars because you have to pay extra for the inspection. This additional certification is ideal for one who wants the security of a car in excellent condition without paying the price of a brand-new one.
Should I buy a new or used car? As we said, price is one factor that plays a crucial role in your decision. However, consider all these factors before choosing one.
Should you buy a used or new car? Running thorough research is the best way to decide on it. Also, follow these tips to find the ideal deal on your car.
It is critical to know when you should buy your dream car. Under normal situations, you must hold off the purchase until the end of the month because many dealers are looking to meet quotas at that point and are more willing to negotiate. Also, because dealers want to get the vehicles off the lot, they could be instructed to search for models that are being phased out or redesigned.
But you must be aware that the prices are at record highs and won't start to come down until at least 2023. So consider delaying a car purchase if you currently own a dependable car or live in a place with good public transportation facilities.
Dealerships continue to handle the majority of new and used car sales. They help you examine and test drive many cars in one day. Also, they give you access to finance, and occasionally even offer extras like complimentary tire rotations or oil changes. With high used car costs, a dealer will frequently also accept a buyer's old car as a trade-in. But dealers have drawbacks such as their tendency to add extra services to car purchases at overpriced costs and their frequent use of forceful sales practices.
Utilizing a no-bargain dealership, such as CarMax, Vroom, or Carvana, is an additional choice. Although they may price more than the typical dealerships, these companies typically receive favorable customer feedback. They promise stress-free shopping, a non-negotiable price, money-back guarantees, and big and user-friendly inventories. Also, they will deliver the car to your door.
Purchasing from a private seller is typically less expensive because there are fewer overhead expenses and little risk of inflated add-on prices. Buying from a private seller is an option for customers who don't mind managing their paperwork, setting up their financing, and paying state sales taxes when registering the vehicle.
Paying the entire amount in cash is one option that every customer can consider. It will make them free from monthly payments and interest. But not everyone will enjoy it as they lack the necessary savings. Moreover, since dealers profit from financing, they are less willing to negotiate on price with cash purchasers. Other options include leasing or loans.
With leasing, customers normally pay less each month. Still, they don't own the car after the stipulated term of three years unless they pay a sizable lump sum. Since they don't own the car throughout the lease period, it can be risky if they make modifications like adding a sound system or upgrading the engine. Additionally, they must pay a fee for severe wear and tear, early lease termination, or exceeding a certain number of miles.
Along with reducing mileage limitations, lease providers have started decreasing the incentives they formerly provided. So, most people who are now looking for a car should consider loans if they cannot pay cash. The fact is that loans are typically less expensive than leases, especially for customers who keep their cars for a long time.
Additionally, people with loans are not penalized for early termination or concerned about mileage or wear. The consumer owns the vehicle at the end of the loan period, which is vital. Loan periods may be as long as 84 months. To reduce overall expenditures, most experts advise sticking with shorter loans with lower interest rates. So, loans are less expensive than leases, particularly for customers who keep their cars for a long time.
Drivers who have a loan or lease on a car and owe more than it is worth get protected by GAP, which stands for Guaranteed Asset Protection. It complements standard insurance by covering the difference between the car's value and what they owe if it is totaled or stolen.
A new car will cost more but less for maintenance and will have new technologies and features. But a used car will be inexpensive, but the maintenance costs can increase if you don't research the car thoroughly. So should I buy a new or used car? The answer to this depends on your budget, the depreciation value, and its special features.
When you have a specific car in mind, check around and obtain finance approval before going to the dealership to receive the best possible deal!
It depends on factors like your budget and the depreciation value. A new car will have more features and less maintenance cost. Though inexpensive, a used car may have more repairs and lack additional features.
An average used car now costs more than a new one due to the shortage of new car inventories.
The main two disadvantages of buying a new car are the following.
The prices of new cars will probably start falling by 2023. But fortunately, the cost of used cars is coming down, according to the experts.