New vs. used
The comparison below can help you decide if a new or used car is best for you. Click on each item to learn more.
- Higher price
The purchase price of a car is higher when the car is new.
- Instant depreciation
Depreciation is when the value of a car goes down due to wear and tear over time. Almost all cars depreciate. A new car depreciates the minute you buy it – 15% or more. The value can drop hundreds or even thousands of dollars the day you drive it off the car dealer’s lot.
- Higher insurance, tax & fees
Insurance, taxes, and registration fees for a car are higher when the car is new. Used cars are generally less expensive to insure.
New cars come with a warranty of up to 10 years or 100,000 miles.
+ Latest features & options
With a new car you can often have the flexibility to order a car with the features and options you want.
+ Top condition
A new car should have no previous wear, mechanical problems or body damage.
+ Lower price
Used cars have a lower purchase price and can be a much better value overall. If you purchase from a private seller with no dealer in the transaction, you’ll probably get a better price – but if the deal turns out to be a bad one, the seller usually will not allow you to return it.
+ Declining depreciation:
Used cars continue to depreciate, but cars typically depreciate the most during the first 3 years.
- Higher loan interest rate
A loan for a used car may carry a higher interest rate than for a new car. Also, cars more than seven years old might not qualify for financing.
- Limited or no warranty
If you purchase from a private seller, your car may not carry a warranty. A dealer may or may not offer you a warranty on a used car.
+/- Fewer feature choices
You can’t “order” a used car with the features and options you want, and waiting for the perfect match could take months. But with a used car you may get more features for the money.
- Higher maintenance
Before buying a used car:
- Thoroughly review all maintenance documentation
- Inspect the car during daylight hours
- Test drive in highway conditions
- Consult a service such as Carfax to determine if the car has been in an accident or otherwise damaged
- Have a mechanic inspect the car before you buy.
Will you be a cool customer when it’s time to buy a car? Click the Next button to find out.
A good middle ground between new and used is a “certified pre-owned” car. These have been checked out by a dealer and come with a warranty.