Buying a new car vs. buying a used car: Which should you choose?

There are many decisions that you need to make when buying a car. You will have to choose the make and model of your vehicle, as well as whether you would like to purchase a used or new car. Although a brand-new car will have the best warranty and latest technology, it is likely to cost more than a used one and depreciate quicker.

Warranty

When looking at New vs Second Hand cars a warranty is usually included with new cars. Most major issues and repairs that arise during the first few years of ownership should be covered by the warranty. Most new cars won't need any repairs within the first year, so it is best to focus on maintaining your car.

This is a comparison to purchasing a used car. It may be less reliable than a newer model due to its age. A used car may require more repairs. These repairs will not be covered by a warranty as they are with a new vehicle.

You have the option to purchase a certified preowned vehicle. CPO (certified pre-owned) cars have been thoroughly inspected by the manufacturer before being resold. It may also come with a warranty.

Technology has made cars more reliable. Many models don't need to be repaired until they have driven over 100,000 miles. They may then be closer to 10 years of age. You could purchase a three-year-old car and then sell it after five year without having to make major repairs. You may also be able sell it at a very similar price to what you paid for it.

To find a model that is performing well, you can also look at Consumer Reports or other independent reviews.

Price

Used cars are generally more expensive than new cars. Dealers may offer financing for new cars at a lower rate to make it more appealing. This can help reduce interest payments over the loan's life. Dealers may even offer a zero interest loan for new cars.

Although you won't be able to get zero-interest loans on used cars, your local credit union or bank can offer you good financing options.

Insurance

Your insurance rates might be lower depending on which model you choose. It is cheaper to replace an older model than it is to replace one.

You may be able save money if you're in your twenties, and are paying high insurance rates due to your age.

Technology

New cars will feature the most recent technology. This will allow you to find vehicles with higher gas mileage and lower emissions. There are more hybrid options available, which could reduce your monthly transportation costs. Technology has improved to make it easier for you to connect to your smartphone, listen and play music, and find your way using GPS.

Depreciation

It is important to remember that buying a vehicle is not an investment. Cars are assets that decrease in value over time. A car loses its value the moment you drive it off the lot.

A benefit of purchasing a used car is that the previous owner will take the largest depreciation. You may be able recoup some of your costs by buying used and maintaining the car well.

Club auto is the place to go if you're looking for more information about the car that interests you.