Have you ever wondered if it’s better to buy a new or used car? (Either way, don’t forget to do your research on auto insurance while you’re at it.)
There are pros and cons to each, and every person’s situation is different. Here’s some of the things to consider.
New or used? It’s the most fundamental car shopping question.
While neither choice is inherently better, your situation, preferences and priorities might help lead to one conclusion over the other. Let’s unpack what each option has to offer.
Is New the Right Move?
If you think you might be among those shopping for a brand-new vehicle, consider a few pros and cons first:
Pros and Cons of Buying a New Car
| Pros | Cons |
|---|---|
| Newer safety features. | Typically more expensive to insure. |
| Customizable. | Maintenance costs required to maintain the warranty. |
| Typically has better fuel efficiency and lower emissions. | Higher taxes. |
While the rule of thumb that new cars are generally costlier still holds, the gap between new and used car prices has narrowed for many models in recent years. Used-car inventory remains below historic levels following pandemic shortages, leading demand to exceed supply, according to CarFax®.
In addition, interest rates for used cars typically top those for new cars by a couple percentage points. Some manufacturers even offer financing deals for as low as 0% on certain models at this time of year as they look to move inventory.
So, it’s important to do some investigation to see what deals might be out there. A few factors to keep in mind as you begin to conduct your search include:
- Rebates: Many car manufacturers offer rebates on new cars, so ask your dealer about them.
- Costs and fees: Check your invoice for added costs or fees and talk to the dealer if you see things you didn’t request such as fabric or rust protection. Some dealerships charge destination charges to deliver your car to the dealership – but some will waive it if you ask.
- Safety features: They’re only valuable if you actually use them. One recent survey found that a surprising amount of drivers turn off car technology that could help keep them safe on the road.
Is Buying a Used Car Worth It?
Another consideration to keep in mind during your search is whether you’ll be able to find the used car you’re looking for. During the early years of the pandemic, factories weren’t producing as many new cars, meaning the current selection of used cars might be limited.
Should one catch your eye, here are some things to consider:
Pros and Cons of Buying a Used Car
| Pros | Cons |
|---|---|
| Might be less expensive to insure. | Older safety features. |
| More car for your money. | More frequent repairs. |
| CarFax® vehicle history report provides a detailed history of the car. | Not customizable. |
A few more tips when buying a used vehicle:
- Research the vehicle’s history. Many dealerships and online listings offer vehicle history reports to give you peace of mind. Even if they don’t provide them, you can purchase a report with the car’s VIN.
- Ask about a warranty. Some used cars come with the factory warranty while some don’t. It’s better to ask than to assume.
- Beware of the extended warranty. Many dealerships offer them (but not all buyers need one) while other certified used vehicles come with an existing warranty. Depending on the deal, you may be better off saving for maintenance expenses than shelling out money for an extended warranty.
Once you’ve weighed the pros and cons of each option, the next step is to understand what really drives the total cost of ownership.
Comparing Costs of New vs. Used Cars
Let’s take a closer look at what affects the cost of buying a new or used ride.
- The value of the vehicle itself: Resources like edmunds.com and the Kelley Blue Book are very helpful in assessing the value of a vehicle.
- Upkeep, parts and repair: Don’t forget to consider upkeep and repair costs if you’re buying used and looking at a luxury or foreign vehicle as opposed to a domestic one. Parts may be more expensive if they have to be shipped overseas, and labor costs can also be higher (not to mention you may have to start filling up with premium gas).
- Electric Vehicles and Hybrids: These types of vehicles typically come with higher sticker prices but can cost less to own over time depending on driving habits, fuel prices and available incentives. Shoppers also need to weigh charging costs and potential insurance differences as well as the value they place on a smaller ecological footprint.
- Taxes and registration fees: Whether buying or leasing, be sure you’re prepared to pay taxes and registration fees, which can amount to thousands of dollars depending on the final cost of your vehicle. And always get the facts. Don’t forget to do your research on a fair price for the vehicle you’re interested in, too.
- Price of auto insurance: Ever wonder what’s cheaper – insuring new cars or old ones? Don’t overlook the help your Middle Creek Insurance Agent can give you about the final price of a vehicle, how to properly insure it and what the difference in insurance will be if you’re deciding among several makes and models. Read more about what determines the price of your auto insurance.
- Who will be the primary vehicle operator? Inexperienced operators can have higher premiums, but may benefit from newer safety features such as backing cameras. You can contact your agent to quote the different vehicles – before you go to the car lot.
Should I Buy My Car Online?
Purchasing a car online has always been an option through forums like Craigslist, eBay Motors and Facebook Marketplace. Now, more vehicle sellers like Carvana and Tesla are utilizing this platform as well.
There are some pros and cons to purchasing your car online, and it’s good to be aware of them before you go that route. They include things like:
Buying a Car Online: Pros and Cons
| Pros | Cons |
|---|---|
| Larger (national) selection. | You can’t really test drive it. |
| It can be cheaper. | Maintenance costs might be required. |
| More pricing transparency. | No record of reliability in some cases. |
| Convenience. | Higher taxes. |
| Some online sellers offer limited return policies. | Less Local Impact. |
Another thing to consider: When you buy from a local business in your community – such as a car dealership – the impact of your purchase stays local by strengthening the local economy and creating jobs. When you buy from a local dealer, you might also get a go-to local professional for any follow-up questions that arise about your new ride once you’re on the road. If you are buying a used vehicle, always try to make arrangements for your local mechanic to inspect the vehicle prior to purchase. Yes, it would be an additional cost – but it could save you significant repair costs after a sale.
Car Insurance to Fit Your Needs
No matter which route you go to purchase new (or new to you) ride, it’s important to protect your new purchase.
An insurance policy from Middle Creek Insurance can help you do just that. Get a free auto quote today online or give us a call at 919-524-2149.
