New Car or Used Car? Here’s How to Choose

Buying a car – new or used – is something most of us will do in the near future. Every year, at least 17 million new cars are sold in the United States alone according to the Wall Street Journal. At the same time, it’s estimated by The Atlantic that 41 million pre-owned vehicles will change hands in the coming year throughout America. While purchasing a vehicle is a common transaction, it isn’t an easy one. It can be difficult to choose between a new or used automobile.

Both new and used cars have pros and cons. While new vehicles aren’t saddled with any wear and tear, boasting the latest and greatest tech available, used cars are cheaper and often pack repairs and upgrades that improve longevity. But these are only a few of the factors that can influence your decision to buy new or used.

If you’re having a hard time deciding between a new or a used automobile, find some clarity with the following guide to help you make an informed choice.

Determine What’s Most Important

First and foremost, you need to decide what matters most – what can you not live without in your next car? What do you need to drive comfortably and confidently? New cars offer different options than used cars.

Do you want a car that doesn’t require repairs or maintenance? A new car should be free of any problems for its first three to five years. Used cars, however, can require new parts and regular trips to your local mechanic. Do you need the latest safety or technology equipment? Do little details like scratches or dents bother you? A used car is limited in what it can offer, even if it’s just a year old. Do you want to own your next car for a few years or a few decades? Used car owners tend to own their vehicles for less time than new car buyers.


Once you’ve decided what’s a necessity and what you prefer, you can start to narrow down your choice.

Know the Financial Cost

Money is one of the most important factors in choosing a new car or a used car. You need to determine how much you want to (and can afford to) spend on your next vehicle.

For most new car buyers, financing the purchase is a given. This means you’ll have to secure an auto loan from a banking institution or the dealership itself. If you can afford a substantial down-payment and get a great rate on your loan, monthly payments won’t be particularly egregious. If not, financing a vehicle over the course of five years or more will cost you a pretty penny in interest. Make sure to consider whether you can afford monthly payments for three to five years and if you have enough for a down payment.

Of course, used cars sell for substantially lower prices. Buyers typically have more flexibility when it comes to financing a pre-owned vehicle. What’s more, savvy shoppers can usually haggle quite a bit over the price of a used car from a dealership or independent seller. Additionally, buying a used car doesn’t have to come with a monthly payment or any interest. Find a car within your budget, and you can pay the entire price instantly, leaving you with more financial flexibility.

Consider the Pros and Cons of New Cars

The biggest advantage of choosing a new car is that you don’t have to worry about what a previous owner might have done to the vehicle. Furthermore, new cars have the latest safety features, conveniences, and electronics. Generally speaking, buyers don’t have to worry about repairs outside of routine maintenance for a long time. If something breaks during the first 100,000 miles, your warranty will cover the repairs.

However, new cars aren’t always the smart choice for every driver. Easily the biggest disadvantage of a new car is the loss in value you’ll experience due to depreciation. A new car can lose thousands of dollars in resale value the second you drive it off the lot. If you’re financing a new car, you’ll also pay thousands of dollars in interest over the course of the loan, driving up the cost more than what you see at the dealership.

Review the Pros and Cons of Used Cars

The best pro about buying used is used cars cost less to own and operate – if you do your homework. The original owner absorbed the initial depreciation that every new car experiences when it’s sold for the first time. In addition, the lower resale value of a used car will reduce registration fees and sales taxes. Used cars are also less expensive to fix for the most part, making your repairs hundreds of dollars rather than thousands.

Unfortunately, though, used cars require more frequent maintenance to perform reliably. Even if it passes a lemon check and the previous owner disclosed its honest history, a used car can have persistent problems. Used cars also see a higher frequency of part failures than new vehicles. If you live in an inspection state, it will become increasingly difficult for your used vehicle to earn a clean bill of health as the years pass; older vehicles often cannot meet stricter environmental or performance standards.

Make a Decision Before You Begin Your Search

Prior to looking at any specific vehicle, you should decide whether a new or used car is right for you. If you don’t know a lot about automotive maintenance and repairs, you should probably opt for a new car at the lowest price you can afford. If you want to save money on a vehicle and have the time and know-how to perform repairs yourself, a used car is a wise move.

The keys to getting what you want out of a new or used car are preparation and communication. Far too many consumers buy cars without researching the models in question, asking hard questions of the sellers, or negotiating on price. At the end of the day, any market can be a buyer’s market if you do your homework and learn to negotiate effectively.

Michal Chmursky / Shutterstock
Michal Chmursky / Shutterstock