Are you in the market for a new vehicle and want to choose between new vs used car? While it might feel great to buy brand new, there are a few advantages to buying used. The big advantage is cost – you will save thousands of dollars over your vehicle-owning life by purchasing used. Why? Depreciation.
In just one minute off the car lot, your new vehicle loses 20% of its value. So, a $30,000 vehicle will immediately lose $6,000. By the end of the first year, a new car loses around 30% of its value. You may not feel it right away, but you will when you go trade it in, or sell it.
Here’s a scenario:
You buy a vehicle car for $30,000 and sell it three years later for $15,000. The car has cost you $15,000 in depreciation.
You buy the same car, but it’s three years old when you buy it. You could buy the car for $15,000. Three years later you could sell it for $10,000. So, the used car depreciation cost you only $5,000.
But buying new feels so great. That’s true and you have to weigh that against the higher costs./
Benefits of Buying Used Car
You may worry that you’re inheriting someone else’s problem. Not so much, anymore.
Vehicles today are more reliable. It’s not uncommon for some cars to deliver more than 100,000 miles before needing major repairs.
All vehicles require regular maintenance such as oil changes, tire rotation, brake jobs. But you can drive today’s cars much farther in between these scheduled maintenance visits. Even tires and brake pads last much longer than before.
Here are a few other advantages:
- Lower insurance rates: When a vehicle is worth less, it costs less to insure.
- Choice: You can’t get a made-to-order vehicle, but perhaps you want a model, or an option package, or even wheel design that’s no longer made. You have a wider selection of used vehicles.
- More car for your dollar: You’re saving money so you could move up to a luxury vehicle.
- Not all cars depreciate at the same rate: Some brands are known for holding their value well. You can check the Kelley Blue Book for more information.
Benefits of Buying New Car
Okay, so there are advantages to buying new. Here’s how:
- Car shopping easier: No need to evaluate the condition of the car. Automakers offer new-car incentives and new car loans have better rates. However, used car rates are competitive.
- New features. Every year, new vehicles offer new features for comfort, performance and safety. You’ll need to wait several years to get them in used cars.
- Made to Order: You can select options, interior and exterior colours, etc.
- Warranty: Yes, a new vehicle comes with a warranty but you can buy warranties for used cars or go the certified, preowned route.
- Advanced Tech Gadgets: New cars come with the latest tech but more used car dealers are offering high-tech options.
- Higher Fuel Efficiency and Lower Emissions: New cars are more fuel efficient, while getting more powerful.