What should you consider, though? Here are a few of the pros and cons about new and used cars.
When you buy a new car, you can get exactly what you want, from color to rim style to sound system. Some options come in packages, though, so to get one you might need to pay for more. New cars are also, well, new: they don’t have chips in the paint, wear on the tires or tears on the upholstery that a used car may have. Such minor imperfections don’t necessarily impact the usability of the car, of course, but they might impact your enjoyment of it.
You’ll need to decide whether having a pristine vehicle is important enough to overcome the downside of a new car, which is the upfront and ongoing costs: the purchase price is significantly higher, the taxes are higher because of the higher purchase price; registration is more costly because it, too, is based in part on the value of the car; and insurance premiums will be higher to protect the higher-value asset.
The value of the car also depreciates quickly in the first few years, meaning that if you wanted to sell it even one year after purchase, you’d get a fraction of what you paid – even if you hardly drove it. For example, according to industry resource Kelly Blue Book, the fair market price range for a new 4-wheel drive 2014 Dodge Durango SXT (basic model) is $30,254 - $32,247; the same 2014 vehicle used and purchased from a dealer is estimated to cost $28,399, a 12 percent drop in value in less than one year. A 2013 model, just one year old, is estimated at $26, 056, a 20 percent drop in value in a year.
This brings us to the upsides of buying used: you’ll pay less for the vehicle, someone else has taken the hit on the car’s almost instant depreciation, and the other associated costs including insurance and registration will be lower than buying new.
But what about the downside of buying a used car? There are the potential minor nicks and scratches mentioned earlier, of course, but there are other considerations. Most significantly, if the car has been in an accident, there could be chassis damage that you can’t see; if the car wasn’t properly maintained, there could be engine wear that will end up costing you money down the road.
There are several ways to mitigate these risks when buying a used car. CarFax is a service that will research an individual vehicle based on its VIN (Vehicle Identification Number), which is a unique identifier every car and truck is assigned, and learn if it’s been in a reported accident, and what the damage was. You can then determine whether to take the car to a mechanic for professional assessment. Buying a “certified pre-owned” used vehicle offers some protection as well: the cars have been inspected, necessary repairs made, and a warranty included. A certified pre-owned vehicle will cost a little more than buying the same model direct from the current owner, but you may decide the peace of mind is worth it.
Whether you decide to buy new or used, be sure to properly care for your car, most importantly for your own safety, but also to retain as much of the value for when it comes time for you to sell it and claim your next ride.