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6 min read . Published December 01, 2022
Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the ways and pitfalls of borrowing money to purchase a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to manage their finances by providing concise, well-researched and accurate facts that break down complex topics into manageable bites. The Bankrate promises
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New is often a good choice if you require the most recent features as well as lower maintenance costs at the beginning. Buying used might fit better if you are willing to sacrifice certain features in order to save money on the initial purchase and insurance.
Compare costs: New vs. used cars There are many options to scope the best deal, new or used. New cars can be found at local dealerships or through search engines like or Edmunds. Used cars are offered at dealerships, however you can also find them and possibly cheapervia independent dealers as well as private-party sellers and superstores such as . In general used vehicles are more affordable than new cars. But both have increased dramatically in price over the last few years. New car payments have jumped from a monthly average of $554 in 2019 to $667 in 2022. That’s which is an 18.5% difference. Used cars also saw an astronomical increase from $391 to $515 which is an increase of 27.4% difference. In order to be prepared for the costs of owning a car- new or used — and can give you a sense of purchase costs and maintenance costs over five years. Here’s a price breakdown of Edmunds for a brand-new Honda Accord versus a used one. New 2022 Honda Accord EX-L
Refurbished 2017 Honda Accord EX-L
Price of the typical listing
Estimated monthly payment
Estimated cost of the first year of ownership maintenance expenses
$1,371 Monthly payments are based on average rates of interest for both new and used vehicles as of Q1 2022 and a 60 month duration. Maintenance and repair costs in the first year of ownership are according to Edmunds. Price should not be the only aspect you consider when selecting an automobile. You must also consider factors like depreciation, safety features, reliability and your preferences. Considerations when buying a new car Buying a new car is a lower-maintenance investment that is based on the most recent technology. The advantages of buying a new car is equipped with a variety of options that you get to pick when you locate the right dealership. Customization: The primary benefit of purchasing a brand new car is the possibility of having it outfitted to your preferences and preferences. You can choose the color and style that you want and request any add-ons that appeal to you. Modern technology offers practical benefits as well. You will be driving away with the most recent technology as well as safety equipment. Better interest rates: With the purchase of a brand new vehicle you’re more likely to secure a better interest rate on an auto loan than with an used vehicle purchase usually by a few percentage points. Reliability: You won’t have to contend with any potential hidden mechanical problems when you buy new. Additionally, it will reduce your spending on maintenance and repairs in the initial months of owning. Pros of buying new, buying new is more costly and has some disadvantages that could eat away at your wallet. The cost is higher new cars are typically hundreds of dollars higher than used counterparts, which could make a down-payment or monthly loan payments more difficult to manage. Depreciation: You’ll also have to contend with , or the speed at which your vehicle decreases in value. The saying goes that new vehicles lose value when they leave the lot. That means that new vehicles lose 20% of their value during the first year of ownership, and depreciation will continue throughout up to 10 years after the initial purchase. Costs for insurance are higher Newer cars are generally more to insure due to their greater risk of theft, greater value , and other factors. If you think that this is the best option for you, you should plan and look out for . Timing your car purchase carefully and could help reduce initial expenses. Things to consider when purchasing used vehicles typically have less cost and appreciate more slowly, but have other shortcomings to be aware of. Pros of buying used With a pre-owned car, you could save money on your monthly payments, insurance, and other charges. Furthermore, depreciation may be slower. Have a look at these key benefits below less expensive The main benefit is that they are generally less expensive than their new counterparts. Getting the same model you want a few years old could help you save thousands of dollars. Lower insurance costs and fees: Many pre-owned cars carry lower fees for titling and sales tax. You may save both on the purchase and over the life of the vehicle. Slower depreciation: Used vehicles also appreciate more slowly. Rather than losing 20 percent of their value in the first year of ownership, a three-year-old car would likely just lose 10. A negative experience with buying used might make you adjust your list of wants for your next ride, research the car’s history and put aside money to keep the car in good condition. Making compromises: You’ll have to research to find the design, color and style you want. In the end you might have to make compromises. The market for cars is highly competitive at the moment and you may be unable to tick every box. The car’s history: You’ll be required to verify the maintenance history of your vehicle to ensure you know that previous owners was responsible for it. It’s advisable to bring the vehicle to a reputable mechanic for a routine checkupwhich includes a brake inspection and engine test before closing any deal. You can expect to pay around $100 for the work of the mechanic, but it is well worth the cost. More expensive maintenance costs even if your car is in relatively good condition, a used car will require more repairs and maintenance over the course of time. This can eat away at the savings you make from the initial purchase, so be sure to consider your long-term budgeting when selecting new or used. If you are trying to save money on your initial purchase, a used car is an excellent option. But , you’ll have to take into account the cost in the long run which includes repairs and maintenance. Certified pre-owned options If you’re thinking of purchasing used, but aren’t sure about trusting the vehicle’s history it’s an excellent option. A certified pre-owned car is a pre-owned vehicle that has undergone a complete examination by the dealer or the manufacturer. These vehicles are considered to be an intermediate between used and new vehicles in terms of price upfront as you’ll be charged in order to get the check. This certification adds value for a driver who wants the security of a car in mint condition with the cost of a brand new car. What should you consider when deciding between a brand new or used vehicle Deciding between a new or used vehicle will come down to a variety of factors, including factors like your budget and tastes and requirements. Consider these issues when choosing which one is best for you. Budget Multiple costs are often less expensive when you purchase a used vehicle rather than a new one. Everything from the to dealer fees is less expensive when you buy a used vehicle. The vehicle you choose, the purchase price is usually lower for a used vehicle. When you crunch the numbers to determine how much car you can afford, look beyond the monthly payment and insurance. Include annual registration fees, fuel expenses, maintenance and repairs. Bells and whistles One benefit of purchasing an all-new car is that it comes with the most recent technologies and safety features. Furthermore, if you want to be capable of choosing a particular vehicle color or interior finishes is important to you, then a new car purchase will make this easier. If you are buying a used vehicle it is possible to spend a long time trying to find exactly what you want. However, the pleasure of choosing the right package for tires and sound system, or even seating could not justify the cost savings by avoiding these add-ons and buying second-hand. If you are concerned regarding the safety of the car you’re thinking about buying using the tools on the to check whether it has a safety score. Maintenance needs An older model might have more expensive maintenance costs, which is important to consider if you’re living on a small budget for household expenses. Much of the maintenance associated with a brand-new car is covered by warranty. However, if you’re considering an old car that’s not longer under warranty, this isn’t necessarily a deal breaker. You can to get the extra protection you require. The typical extended warranty is roughly $1,480, but you could spend far more or less, depending on the type of vehicle you own and the level of coverage you select. What can you do to get the best price on your vehicle, whether you opt to buy a the new model or used one, you must remember that researching the vehicle is the most important factor in . The research you conduct should include examining the model’s safety record, insurance costs and the cost-to-own for five years. Make sure to assist you in making the right choice. It is also advisable to consider a test drive of various vehicles and talk with a few dealers by getting estimates from several . Ensure that you get the lowest monthly cost and the most competitive financing terms to keep the most of your hard-earned cash in your pockets. The main thing to consider is whether you want new and used cars comes down to many factors, including the concern you have about depreciation, your budget, your desire to get certain features and how long you’re hoping to own your vehicle. When you’ve got a car in your mind, research prior to heading to the dealer, make sure you get the most affordable price. Learn more
The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely taking out loans to purchase a car. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to control their finances through providing concise, well-studied information that breaks down complicated subjects into bite-sized pieces.
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