New vs. used

The comparison below can help you decide if a new or used car is best for you. Click on each item to learn more.

New cars: Plus & Minus

• - Higher price

  The purchase price of a car is higher when the car is new.

• - Instant depreciation

  Depreciation is when the value of a car goes down due to wear and tear over time. Almost all cars depreciate. A new car depreciates the minute you buy it – 15% or more. The value can drop hundreds or even thousands of dollars the day you drive it off the car dealer’s lot.

• - Higher insurance, tax & fees

  Insurance, taxes, and registration fees for a car are higher when the car is new. Used cars are generally less expensive to insure.

• + Warranty

  New cars come with a warranty of up to 10 years or 100,000 miles.

• + Latest features & options

  With a new car you can often have the flexibility to order a car with the features and options you want.

• + Top condition

  A new car should have no previous wear, mechanical problems or body damage.

Used cars: Plus & Minus

• + Lower price

  Used cars have a lower purchase price and can be a much better value overall. If you purchase from a private seller with no dealer in the transaction, you’ll probably get a better price – but if the deal turns out to be a bad one, the seller usually will not allow you to return it.

• + Declining depreciation:

  Used cars continue to depreciate, but cars typically depreciate the most during the first 3 years.

• - Higher loan interest rate

  A loan for a used car may carry a higher interest rate than for a new car. Also, cars more than seven years old might not qualify for financing.

• - Limited or no warranty

  If you purchase from a private seller, your car may not carry a warranty. A dealer may or may not offer you a warranty on a used car.

• +/- Fewer feature choices

  You can’t “order” a used car with the features and options you want, and waiting for the perfect match could take months. But with a used car you may get more features for the money.

• - Higher maintenance

  Before buying a used car:
• Thoroughly review all maintenance documentation
• Inspect the car during daylight hours
• Test drive in highway conditions
• Consult a service such as Carfax to determine if the car has been in an accident or otherwise damaged
• Have a mechanic inspect the car before you buy.