New vs. Used Car: What to Consider

Melanie Lockert, April 2018

New vs. Used Car: What to Consider

You might think you're ready to get a new set of wheels, but first, there's one fundamental question you'll have to answer first: should you get a new or used car? When it comes to the new vs. used car debate, there are a lot of factors to consider. Here are some pros and cons to think about before making deciding which is the right decision for you.

Getting a Brand New Car

There's something about that new car smell and being the first person to really drive it day-to-day that just feels good. Having a new set of wheels that get you where you need to go can give you a boost of confidence and set your mind at ease. Afterall, your car most likely won't die or need major repairs anytime soon. Still, it's important to consider all of the pros and cons before committing to buying new.

Pros:

  • There's no pre-existing wear and tear
  • There may be new technology features
  • It may include the latest safety features
  • It'll be under warranty

Cons:

  • It can cost more out of pocket
  • With higher payments, there's potential for falling into debt
  • Offers and financing can vary from dealership to dealership — you'll want to be sure to do extensive research beforehand

Going with a Used Car

On the other hand, going with a used car can be more economical in many ways. While you might be able to save more in the short-term, make sure you consider the big picture before opting for a previously owned car.

Pros:

  • It's more budget-friendly
  • You'll pay less in taxes due to the lower cost
  • You don't have to be as paranoid about scratches or dents
  • You may be able to receive additional features (like heated seats) that normally come with new cars

Cons:

  • There might be existing wear and tear
  • You may not know all of the car history
  • You may be starting your ownership with high mileage
  • The car may not have a warranty
  • It could need repairs sooner than you'd like or expect. In this case, it may have been cheaper to buy a new car.

If you're considering buying a used car, it's crucial you get a vehicle history report so that you can be aware of any previous accidents or major issues with the car. You can check out sites like Vehicle History or Carfax to get information about the car in question.

Which One to Choose: New vs. Used

If you're in the market for a car, you might have your heart and budget set on either a new or used car. However, it's important to look at all sides to determine which is right for you. If you drive a lot or have a family, a new car with all of the latest technology, safety features, and a clean slate on mileage might make more sense.

If you need a car just to run errands and would like to stick to a more strict budget, then opting for a used car might be your best bet. Answer these questions for yourself to help you decide which features you'd like to have included:

  • How often do you use your car?
  • What do you use your car for? (commuting, delivering, ride-sharing, family, etc.)
  • How many people will be driving the car?
  • How much can you reasonably afford?
  • What extra costs will be associated with this car? (parking, taxes, insurance, gas, etc.)
  • How much gas mileage does the car get?
  • How will the car affect your car insurance rates?

Answering these questions can help guide you in your decision regarding a new vs. used car. Ultimately, you want to get a car that works with your budget and your lifestyle.

Content provided for informational and educational purposes only and is in no way to be construed as financial, investment, or legal advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal financial issues.

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