How to Determine Whether a Used Car or a New Car is Right for You

Posted Thursday, Aug 10, 2023

Purchasing a vehicle can be exciting and overwhelming. Exciting because you get to experiment with a new vehicle, and overwhelming because you must make so many difficult decisions. Whether to buy a used or new car is among the most important decisions. Although getting the answer to this question can be challenging, considering several factors can help ease decision-making. Below are a few factors one must consider when contemplating buying a new or used car to determine which one is right for you.

 

Determining Whether to Buy a Used or New Car

Both new and used cars have their advantages and drawbacks. Thankfully, considering a few parameters can help buyers decide which option is right.

 

Depreciation

Depreciation is one of the top concerns when purchasing a new car. Statistics show that a car can lose approximately 20% of its value in the first year and 15% more yearly until the five years. Therefore, after five years of purchase, a new car can lose up to 80% of its value. Hence, if you consider purchasing a new car, it is a bad decision in terms of finances. This is because you will get significantly less than the initial amount you paid for the vehicle when you sell it.

On the other hand, a used car comes with a depreciation benefit. Since the vehicle's previous owner has borne the depreciation loss, you don't have to worry about losing a significant amount of its value upon purchase. Therefore, you can expect to sell the vehicle for a small loss or even profitable value months or years after using it. Whether you suffer a minor loss or gain a profit after selling the vehicle depends on several factors, like the age of the car, maintenance, etc.

Therefore, if you do not wish to bear substantial depreciation losses upon purchasing a vehicle and instead want to protect your investment, purchasing a used vehicle is the best decision. However, if you wish to purchase a new car and have the finances necessary to ensure a depreciation loss doesn't impact you negatively, purchasing a new vehicle might be the right decision.

 

Maintenance Cost

When considering buying a used or a new car, it can be easy to overlook the maintenance costs. A new car comes with the benefit of having low maintenance costs in the initial years of purchase. Moreover, even if your new car requires maintenance, the dealership usually bears the costs thanks to features like a warranty or free servicing. On the other hand, used cars usually don't come with such benefits. Therefore, any maintenance or repairs come out of your pocket.

Additionally, used cars may also require higher maintenance and servicing after purchase since their components are old and have suffered wear and tear. However, you can reduce your maintenance costs by ensuring you are not purchasing a vehicle that is not well-maintained or is too old.

 

Insurance Expenses

Insuring a vehicle, whether new or used, is important to protect your investment in case of unfortunate events like accidents or theft. However, insurance can come at a hefty price, especially if you are getting a new car insured. Since new cars cost significantly higher than used cars, they are at a higher risk of theft and have more expensive and difficult-to-get parts (in case of accidents requiring repairs); insurance providers may charge higher insurance premiums.

In contrast, insurance companies charge substantially less for used cars since they come at a lower cost, are at minimal risk of theft, and the parts of these vehicles are readily available at low prices. Therefore, if you cannot bear the financial burden of paying high monthly insurance premiums on a new vehicle, it would be best to purchase a used car. However, if you have the finances required to bear high insurance premiums without facing financial strain, you can consider buying a new car.

 

Customization Benefits

If you are a car lover who enjoys experimenting with new features in their vehicles but is working on a tight budget, purchasing a used vehicle may be the ideal choice for you. Although it is possible to customize a new car, it comes at a hefty price. Even minor customizations, like changing the upholsteries color, can cost you hundreds and thousands of dollars. In contrast, customizing the use of vehicles can be much more pocket friendly.

Since used vehicles have been on the market for a while, it is also easier for dealerships to acquire their parts for customizations, and these parts are considerably cheaper than the parts of new vehicles. With a used vehicle, you have many choices in terms of customization. You can do anything from performance upgrades to aesthetic upgrades. Therefore, if you wish to customize your vehicle on a budget, it is best to purchase a used car. However, you can invest in a new vehicle if you have the finances to buy and customize a new car.

 

Features

Technology is moving quickly, with automobile manufacturers developing new and improved features like lane-keeping assist and automatic emergency braking systems (AEBS). If you enjoy keeping up with technological innovations and wish to enjoy them in your vehicle, purchasing a new vehicle can help you do so.

However, vehicles with the latest cutting-edge features come at high price tags. In comparison, used vehicles may not have the latest features. Nevertheless, if you purchase a used vehicle that is not very old, you can enjoy many of the features that newer vehicles have.

 

Bottom Line

At the end of the day, whether you should purchase a used or a new car depends on your personal needs, preferences, and desires. Considering factors like features, insurance benefits, customization benefits, maintenance costs, and depreciation can help you decide whether a used or a new car is right for you.

If you decide to purchase a used car, we recommend checking out Auto-Tech, a renowned used car dealership in Sacramento, California. Dial (916) 375-1559 to learn more.