Should You Buy A New Or Used Car?
Most of us here in the United States need a car to get around. There are actually 3 choices for obtaining cars; new, used, or leased. I’m throwing out leasing cars because frankly I can’t see the benefit to anyone who’s not charging it to their business to lease a car. You get it for 3 years, you can only drive so many miles, you still have to pay for all maintenance while you have it and then you have to go through the entire process again, and you might not save any money on the deal; phooey!
Thus, I’m only going to look at new versus used. I’m going to give 3 pros and cons for each of these; you can add your own later on if you’d like. Let’s start with new cars:
1. It’s a new car! Brand spanking new, no one else has ever been in it, new car smell, shiny, pretty and yours. There’s nothing quite like buying your first new car except to repeat the process later on down the line.
2. Full warranty. Many dealers give you either 7 years or 100,000 warranties on cars these days. As long as you keep up the routine maintenance all is wonderful.
3. Cars work perfectly for the most part. Unless you happen to get a lemon, which is rare these days, other than oil changes you probably won’t have anything to worry about on your car until you get close to 50,000 miles. Since some people drive way less than 10,000 a year this means you may never encounter a major issue with your car over the lifetime you might keep it.
1. New cars cost more. For every brand of car it will cost you more than its used alter ego. These days dealers are less apt to work with you on reducing the cost of a car, even if you pay by check (they won’t accept cash on a car that’s more than $9,900).
2. If a new car is wonky, it’s harder to deal with. If you remember #3 I mentioned that these days lemons are rare. But they do happen, and if you end up with one, you have a short window of time before you can get your money back and get something else, even if it’s the same model.
3. Obsolescence. Almost everyone will tell you that buying a car is a lousy investment because it loses at least 10% of its value as soon as you drive it off the premises, and it drops faster after that. Some brands will retain their value better than others but overall, it’s a money loser.
Now let’s take a look at used cars:
1. Lower prices. If you wait even six months you could possibly purchase a very nice used car with few miles on it that someone decided wasn’t for them for upwards of 33% off the original price. I was able to purchase a luxury car that went for $36,000 brand new for $23,000 that only had 5,000 miles on it.
2. Extra inspection. Depending on where you buy your car it’s possible that it’s been thoroughly inspected again by the seller, especially if it’s a dealer. This means if it had any kinks in it they’ve fixed them, but most probably the cars are great.
3. Sellers might work with you on deals. You may not always be able to negotiate prices but you might be able to get some additions to a used car. I was able to get an upgraded sound system on my car because I was willing to pay for it outright instead of going on a finance plan.
1. Disreputable dealers. Unfortunately there are some of these folks out there who will take advantage of you by making cosmetic changes that will last long enough to pass the lemon law period. And, just so you know, getting a Carfax isn’t a guarantee that there’s not things wrong with your car that might not have made it onto the report.
2. Shortened warranty period. You don’t grandfather into the warranty the original owner had most of the time. My car got 3 years or 60,000 miles, even though it was less than a year old when I got it.
3. Trade in value stinks. Unless you owned a classic car or your model is in demand for parts for some reason, you’re going to get less for a trade in when it’s time to get another vehicle, and looking at the Blue Book value might end up being a waste of time.
Now that you’ve seen this, where do you stand on the new vs. used debate?