If you’re confused about new vs. used car: how to decide, here are some tips to get you closer to figuring out what works best for you and your family’s needs.
Bankrate has a great auto calculator you can use to determine whether new or used fits your situation. You have to answer a few questions and the calculator makes a recommendation based on your responses.
In general, keep in mind the following in any new vs. used car: how to decide.
Depreciation – New cars lose 60 to 70 percent of their original sticker price during the first two years. This is called depreciation. If you’re looking for the right car for you and not merely an investment, then depreciation is not a key priority. A new car may fit your needs best.
Budget – How much you have to spend is usually a key priority. If you want the lowest monthly payment possible, generally speaking, a used car is the way to go. Edmunds cautions, however, that used car prices have increased significantly with demand outstripping supply. Used cars do cost less to insure, though, based on loss history of particular models. Still, with the right financing and attractive lease rates, maybe a new car is best for your budget.
Annual Mileage – How many miles you drive each year factors into your decision on new vs. used car. If you drive less than 10,000 miles annually, a good used car may suffice. If you drive 20,000 miles a year or more, you may be better off buying a new car.
Options – With a new car purchase, you can choose a multitude of options, everything from car color to engine size to high-tech features and safety equipment. With used, you’re limited to what the seller has. If you’re very particular about options or have a few specific ones you want, a new car is a better fit. If you don’t care about options, then used may be the way to go.
Maintenance – Do you know nothing about maintenance, only the basics, or quite a bit? The answer may inform you whether new or used is best. If you are clueless how to maintain a car, a new one gives you at least two years (generally speaking) before you’ll have to worry about anything other than regular maintenance service (usually at the dealership where you bought the car). If you know the basics, you can probably get up to speed enough to learn how to properly maintain a good used car.
Warranty – New cars come with a manufacturer’s warranty while used cars may come with some kind of a warranty, but it’s not as long as the manufacturer warranty on a new car and isn’t as comprehensive. If you are very concerned about having a good warranty, buy new. If you’re not concerned or moderately concerned, maybe used will be your best choice.
Length of Ownership – How long do you intend to keep your car? If it’s less than four years, a good used car should do the trick. If it’s 4-6 years, you could go either way. If you intend to hold onto this car for six years or more, opt for a new car.
So, in the situation of new vs. used car – how to decide, how did you do?