Should I Buy a New Car or Used Car?

Young woman trying to decide if she should buy a new or used car.

New car vs. a used car? At first glance, a used car seems to be the sensible choice. But if that’s true, why do some 17 million Americans splurge on a new vehicle each year? They can’t all be reckless spendthrifts.

The simple answer is, everyone’s circumstances are different. For some people, a new car is a right choice. Others are better served to buy a used car. How do you decide? Let’s examine new car vs. used car pros and cons.

Table of Contents

In praise of used cars

Here are four factors that might tilt you into buying a used car.

1. They cost less (you get more vehicle for your money.) After three years a new car is worth around 60% of what it cost new. When you buy a used car someone else takes that initial depreciation hit.

2. Less sales tax. Simple math, if you pay less for the vehicle you’ll pay less tax as well.

3. Insurance costs will be less expensive. Value is just one of many factors, but if the car is ultimately worth less than a new one. It will usually reduce the premium you’ll pay.

4. More goodies. The new car buyer pays a steep premium for luxuries like leather seats and a sunroof, but when the car’s a few years old they make little difference to the price. So if you want to indulge yourself with a high-end sound system or wood trim, you get better value buying used.

Recommended Used Car Shopping Sites

Ryde Shopper – has everything you need to find a used or certified pre-owned car. They focus more on finding you the lowest price instead of providing other additional information that can be distracting and deter you off your goal of buying a nice reliable used vehicle.
Edmunds - is one of the oldest used car research and review sites on the Internet. You're guaranteed to find a great deal on a used car within their hundreds of thousands of vehicles listed online.
Cars Direct – CarsDirect has been providing new car, used car, and auto finance related services and information to car buyers online since 1998. With well over a million used cars listed on their site, you are guaranteed to find the vehicle you’re looking for.
Motor Trend – is one of the best kept secrets on the Internet. Best known for their automobile magazine, MotorTrend’s referral service is 100% free and there’s no obligation to purchase. Just pick the used car you’re interested in, select all your local dealers, and receive deep discount Internet pricing.
Peddle – Is the fastest way to sell an old car online. Tell them a little about your ride, receive an offer instantly and they’ll even come to you to pick it up.
View all car buying tools

The downsides of buying a used car

With a used car you don’t know its history. Perhaps it was babied, but maybe the first owner drove it like they stole it. A vehicle history report will tell you about any big issues like floods or major accident damage.

However, you will also want to have a used vehicle inspected by an independent certified mechanic. This will tell you if there is any physical damage that may have slipped through the cracks on a vehicle history report.

Second, older vehicles need more maintenance. There will be brake fluid and transmission flushes and hose and belt replacements coming due sooner than if you were to buy a new car. Even if you do the work yourself you can’t avoid expenses like tires, shocks, and brakes.

Recommended vehicle history reports

AutoCheck Vehicle History Reports - will let you know if a vehicle has been reported in an accident, branded a lemon, damaged in a flood, reported repossessed or stolen, and more. Be confident in your purchase and enjoy access to benefits such as free Buyback Protection for registered, qualified vehicles.
View all car buying tools

The joy of buying a new car

Although there is nothing like it, it’s not just about enjoying that new car smell. There are some sound reasons for choosing to buy a new car rather than buying a used one.

1. Warranty. Most new cars come with at least a three-year or 36,000 miles of bumper-to-bumper coverage and there’s usually a powertrain warranty stretching out five years or longer from the purchase date. You’ll still need to keep up with oil changes and tire rotations, but those are included with a lot of new car purchases anyway. You will also get to choose if you want to buy an extended auto warranty if you believe you will be keeping the vehicle for a longer period.

2. Choice. When you buy new you can get the exact color, trim, and equipment you want. There’s no need to compromise, which is what you usually have to do when buying a used car.

3. Condition. The new car is as clean inside and out as it ever will be. You’re not sitting among the remains of someone else’s takeout and there’s not a single scratch or chip anywhere.

4. Technology. New cars may offer Bluetooth for hands-free calling along with Apple CarPlay and Android Auto. If syncing your phone with your car is important, you need a newer vehicle.

5. Safer. Newer cars meet tougher crash test standards and get more safety technology. Stability control is standard, rearview cameras are on almost all new vehicles, and features like blind-spot detection and lane departure warning are popular choices.

6. Improved fuel efficiency. Manufacturers are squeezing more and more power from every gallon of gas and new engines get better gas mileage.

Step-by-step walkthrough on how to buy a new car | New Car Buying Cheat Sheet

Must-Read Guides and Resources

How to Buy a New Car Below Factory Invoice Price – True dealer cost and the factory invoice price are not the same… dealer cost can be much lower.
Figure a Fair Profit New Car Offer – How to calculate a fair profit new car offer.
How to Buy a New Car Online – Not sure where to start? My step-by-step guide on how to buy a new car online.

New car vs. used car best value for the money?

If you’re still debating a new car vs. a used car, how about meeting halfway? My advice to get the most value for your money is to look for a car one to three years old. It should still be in good condition, need minimal maintenance, and may have some or most of the factory warranty left.

Best of all, you’ll save thousands while still getting many of the new car features and benefits. Remember to let someone else take the depreciation hit by enjoying a nearly new ride.

After you’ve made your final decision on which type of vehicle to buy, take a look at either my, “New Car Buying Guide ” or “Used Car Buyer’s Guide” for insider tips and secrets on how to buy a car and avoid dealer scams.

Car Price Quotes

Use my recommended tools to find the best deals in your local area.

Rydeshopper
Edmunds
MotorTrend

Find the dealer with the lowest price and save. When dealers compete = You WIN!

Recommended sites for online car shopping

RydeShopper, Edmunds and Motor Trend are the quickest way to compare new car prices in your local area. These online sites will provide you with free, no-obligation price quotes and the discounts you receive will give you confidence on your next new car purchase. Walk away from the dealership knowing you received a good deal, not hoping you did.

About the author

My name is Carlton Wolf and I have been in the retail and wholesale car business for well over 20 years. I created the Auto Cheat Sheet to better educate buyers on the deceptive sales practices found in many dealerships across the country. Please understand, not all car dealers are dishonest. However, you never know who you will be dealing with.

I’m willing to share my knowledge and experience with anyone willing to listen. Please understand that I am a car guy, not a writer.