Should I Buy New or Used?

When it’s time to get a car, and you aren’t certain whether you should go for a new or used model, be careful to look beyond the most common questions, such as “What car will I look best in?” or “What kind of monthly payments can I handle?” These will most often leave you with an expensive car you regret buying. Instead, ask yourself these questions:

How Good is Your Credit?

All businesses love to sell newer products over older ones because they make more money, but that doesn’t always mean it’s more expensive for you. There are often incentives encouraging those with good credit to buy new, such as rebates, cash incentives, and discounted financing.

Sometimes a large manufacturer will cover the down payment requirements on certain new models, so do some research on different dealers.

Is the Depreciation Worth It?

If you buy a new car, and it’s depreciated by $9,000 by the time you’re trying to sell it, that might as well count as an added cost of buying it in the first place. Depreciation is a strong case for buying used, because a new car loses an average of 20 to 30 percent of its value the moment leaves the lot. In three years, your new car can depreciate down to half its original price.

On the other hand, let’s say you intend to buy a new vehicle and keep it for over ten years. By that point, any car has considerably lower re-sale no matter what, so it doesn’t matter. But for a car you only intend to have for a few years, going used is generally better.

What about Repair and Maintenance Costs?

The biggest fear in buying anything used, cars certainly included, is that it won’t last. Not only do used cars have a history of use that might include an accident or issue here or there, but new cars are likely to have warranties for the first few years, or a set number of miles, so you can have it taken in and fixed for free.

Ultimately, buying a car is in your hands, and there are good used cars out there. If you have a Carfax history report or something similar, or just have a qualified mechanic inspect the car all around, you should be able to judge whether a used car is worth buying.

How Handy Are You?

For many people, used cars don’t scare them simply because they or a close friend are a professional mechanic or do-it-yourselfer who knows fixing any issue themselves will cost less than taking it into a shop. If having to change a fuel pump would ruin your day, definitely consider buying new instead.

In general, those looking to keep a car for a long time, with good credit, and who hate dealing with maintenance should buy new, while those with credit issues, or who plan to keep a car for only a few years, or who like to take care of their cars by themselves will be better off with a used car.

Still unsure about whether to buy new or used? Tell us your situation in the comments!

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