Home Automobiles New Cars vs. Used Cars: Which to Buy?

New Cars vs. Used Cars: Which to Buy?

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According to the latest report by the Federal Highway Administration, on average we drive almost 13,500 miles a year. Age groups, 20 to 34, and 35 to 54, account for the bulk of the mileage. This implies that they spend a great deal of time driving to and from work.

It is also the 20 to 54 age range that people have the most expenses, including mortgage, insurance, and other bills, which more than doubles when they have a family of their own. This is why it is important to make an informed decision when choosing whether to purchase a new or a used car, especially since this age group is heavily dependent on driving.

New cars: advantages and disadvantages

The unique advantage of buying a new car is that it has modern upgrades, like higher efficiency and lower emissions, which are, more often than not, something that used cars or older models do not possess. This may prove to be cost effective.

New cars come with several years of warranty, so buyers do not have to worry about the cost of repairs during the span of the warranty.

An obvious disadvantage of a new car is that it is can be expensive, even without the cost of repairs that are covered by the warranty. However, the biggest disadvantage of buying a new car is “car depreciation”. Basically, new cars depreciate in market value as soon as you drive them off the dealers lot. In five years of ownership, your car’s value will depreciate by more than half its original price.

Used Cars: advantages and disadvantages

Used car lot (File)

Buying used cars in Layton, Utah, San Francisco, Chicago, or anywhere in the US has its benefits too. One advantage is that used cars are immune to “car depreciation” mainly because the previous owners have already taken the depreciation hit for you. In fact, you can resell a used car that you purchased for nearly the same price you bought it for.

Another good thing about buying a used car is that the insurance should be cheaper compared to a new car.

On the other hand, the disadvantage of getting a previously owned car is that you will have to deal with reliability and repair costs. However, this can be countered by making sure to purchase from a trusted seller of used cars.

Making a Decision

Couple picking up new car from lot

Whether you can afford a car or not is one of the biggest factors in making this decision. Most finance experts would recommend paying for a car within a three-year period, to get the least amount of interest and to get it for a reasonable price. Whether you choose to buy a dazzling new one that will most likely depreciate or a used car that will serve you just as well, it is up to you and your preference.

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