Some people seem to feel strongly that there is a one-size-fits-all answer as to whether it is better to buy a new or used car, but the fact is that everyone must consider certain personal variables before deciding what kind of car to buy. For some people, a used car is a more financially prudent purchase, while for others, buying new is the better option.
Can You Afford a New Car?
In terms of the up-front price tag alone, new cars are usually more expensive than used. This fact alone dissuades many shoppers from purchasing a new car. In some cases, buying a used car that is just one or two model years old can provide similar mechanical and technological benefits to owning a brand new car, but the price differential can be substantial. For some people, this price differential doesn't really matter, but this is mostly true of people who are quite financially secure. If you are looking at a car and there is a similar model available that is just a year older, it may make sense to purchase the older, used version.
Can You Finance a New Car?
Another factor to consider is financing. Car shoppers with bad credit may not be able to get a good financing deal for a new car payment. In this case, saving up and buying used may be the best option. This is also true for those who aren't sure they will be able to maintain their current level of monthly income. If credit and continued income are not potential areas of concern, buying new may be a suitable option.
Can You Afford Repairs for a Used Car?
Unless you end up buying used through a Certified Used Car programme that includes a warranty, any repairs your used car needs after you purchase it new will be paid for from your own pocket. Ideally, you'll buy a used car that is in decent repair and either has obvious maintenance needs that can be part of price negotiations or has already been fixed up by its previous owner. One way to ensure you won't immediately be hit with costly repairs is to get the car thoroughly inspected by a trusted mechanic before buying. Paying the total vehicle cost up front also leaves some purchasers room to save a bit of money every month for a repair fund. As car parts experience normal wear and tear, they need to be replaced, so this is an inevitability that all car owners face. Used car owners just tend to face this reality sooner than those who own new cars.
Can You Spare Your Car While It's in the Shop?
Conventional wisdom holds that new cars are more reliable than used cars. If you live in an area without public transportation or have a work schedule that requires you to have daily access to a car, buying used may be a bad idea simply because there is a high likelihood that there will be days you can't use your car because it is being repaired at a mechanic's shop. Shoppers who absolutely must have a car in good working order may want to buy a new car.
Will Depreciation Affect You?
Some sources consider new cars to be bad investments because their value as a brand-new, previously unowned vehicle drops the moment the owner takes possession. This means that if you buy a new car and decide a few months later that you'd rather have a different car, your trade-in value will be significantly lower than what you paid for the car, even if you hardly drove it and it is still in pristine condition. Some owners count on their car's resale value when they purchase it, but this value is hard to determine and will certainly be less than the car's final price. Used car owners typically do not have to worry about this value depreciation and in fact may be able to slightly increase their car's value by making repairs and improvements.
Do You Want Special Features?
If you have your heart set on a red, two-door convertible with a specific type of sound system, buying used may not be the way to go. Used cars aren't configurable the way new cars are, and shoppers can back themselves into a corner if they are too attached to certain features while shopping for a used car. This can lead to a shopper accepting a bad deal or overlooking other problems with a used car. With new cars, shoppers can ask a dealership to include certain features in their purchase. These special features often cost more, but savvy shoppers may be able to negotiate some of these features as part of their overall purchase deal, which is usually not possible when shopping used.