New vs. Used Cars: What Is the Better Investment?
When you need to buy a car, you have to answer an important question–should you buy a used car or go with a brand-new vehicle? Most people know that buying a used car will be less expensive initially. But buying a new car also has its advantages.
If you're interested in the latest technology and features that likely have improved safety measures, you might not mind paying a high price tag for a new car. However, if you're looking for the best deal, you'll want to check out certified preowned vehicles, as these can have a lot of the same features as new cars but at a lower price.
Buying new vs. used cars comes down to more than just cost. We'll explain some of the pros and cons of each option so that you can decide which option is right for you.
The Advantages of Buying a Used Car
Used cars have a lot of advantages, specifically the low upfront cost. Since cars depreciate over time, you can find used cars that are only a couple of years old but are thousands of dollars less than the current year model. So buying a used car is a smart way to afford a more high-quality and sophisticated model, even if it's a few years old.
You'll also likely encounter cheaper additional costs, like insurance, registration and title fees, and sales tax. Though these prices may not seem initially important compared to the overall price of the vehicle, they can save you money during the purchase process, as well as throughout the lifespan of the car.
In addition to saving money, buying a used car is likely to be a good investment because of depreciation. When you buy a new car, typically, the depreciation of the vehicle is most significant after the first year. However, if you buy a four-year-old car, you won't lose as much money through depreciation.
The Disadvantages of Buying a Used Car
While you can potentially snag a good deal when buying a used car, there can be a lot of unknown problems that can cost you money. Since you don't know the previous owner or the exact history of the car, you could potentially sink a sizeable amount of money into a car that has a lot of problems.
When you buy a used car, you are buying a vehicle with a shorter lifespan. You should always check out the mileage on a car that you're thinking about buying. A used car with high mileage is likely to have a reduced lifespan, which means that you might have to pay for major repairs or replace the car altogether sooner rather than later.
While it's possible to find the perfect used car, it will take a lot of time and research to find it. There is a limited selection of used cars available, and you may not find the car with the exact features or aesthetics that you want.
The Advantages of Buying a New Car
While used cars are attractive because of their low prices, owning a new car also has its advantages. Besides the new car smell and its use as a status symbol in your community, why should you buy a new car?
One of the biggest advantages of buying a new car is its reliability. When you buy a new car, you won't have to worry about its previous history. But, if something does break or goes wrong, the warranty will probably cover the cost of repairs.
You'll also be outfitted with the latest technology and safety features. When the car is well-built, you won't have to worry as much about safety or reliability. This gives peace of mind to drivers, but especially those with families.
Used cars have a lower price than new cars, but most dealerships put together attractive deals for those looking to buy new cars. Dealers may offer affordable financing packages with super-low interest rates.
The Disadvantages of Buying a New Car
Though buying a new car comes with plenty of benefits, there are obvious disadvantages to buying a new car. The main disadvantage of buying a new car is money. New cars typically cost a lot more than used cars. New cars also depreciate faster in the first few years than at any other time in the car's lifespan.
Another money issue that you should consider is a higher insurance cost and sales tax, plus potentially higher fees for title and registration. Though these numbers might not seem that important at first, the sales tax can potentially add thousands of dollars to the final price. In addition, you'll have to deal with high monthly insurance payments.
Which One Is Right for You?
Overall, deciding between new vs. used cars can be challenging. It's best to first look at your finances to figure out what's affordable for you. Buying a used car that's two to three years old can save you thousands of dollars on depreciation and other costs. However, there's a level of unknown potential problems when you buy used that could be costly. A new car is reliable. Though you pay more upfront and will have to deal with high standard fees, there won't be any unexpected expensive repairs or problems.
Car shopping is an exciting and potentially stressful time. It's a good idea to take your time and carefully go through your options as you consider new vs. used cars. You'll want to take your finances into consideration and think about the initial price, as well as the ongoing costs of owning a particular car (maintenance, repair, insurance, resell value). Brickell Honda has both new and pre-owned inventory.