New vs Used Car Buying Review
Pros and Cons to
Determine the Better Buy
New vs used car buying review. Is that new car smell worth the extra money?
I'm often asked by visitors to the dealership I work for and visitors to this site if it's in their best interest to buy new or used cars. There are benefits to both and there are also some drawbacks to both.
We'll review some of the main benefits and drawbacks just below, along with some car buying tips, which will hopefully help to make your decision on which is the better buy an easy one. So, let's get started...
New vs Used
Car Buying Review
Compare Apples to Apples
With a new vs used car it is much easier to make a side by side price comparison with the new car.
With a new car, you can literally compare the exact same car side by side and choose which one you want based on which dealership is giving you the best price (or whatever your buying trigger is). This makes it much easier for you the consumer to make dealers compete, which in turn leads to greater savings for you.
With used cars, this is not always possible. Factors like miles, condition, service history, aftermarket upgrades, etc. can make it much trickier to do an accurate side by side comparison.
New cars can also save you time in this regard as well. Fill out one quote form and get multiple, competing quotes for the exact same car. Sites like Edmunds.com make it real easy to do this and can shave thousands of the sale price with no haggling.
The New vs Used car buying advantage would certainly go to a new car as the better buy.
Warranty coverage is very important these days, as it seems you can hardly get a car out of the shop for less than $400 for even the most basic of repairs.
This number is easily reached with labor rates ranging from $85-$115 per hour. Not to mention all the power options now standard on most cars. Tack on the computers, electronics and many other complicated parts and equipment and I think you see what I mean.
Of course, it is possible to buy a used car with some factory warranty remaining and/or to buy a vehicle extended warranty, but to have the full factory warranty is always nice for added peace of mind and financial security.
The New vs Used car buying advantage definitely goes to a new car as the better buy.
Know the History
Knowing the history of a vehicle is extremely important to many consumers and it should be. Accidents, fire, flood or constant mechanical issues can lead to an ownership nightmare.
With a new car you know the complete and accurate history of a vehicle, because you were there when it happened. You know how many times it's been in the shop and whether there are any major events in its past.
When it comes to used cars you can always rely on a reputable vehicle history reporting company like AutoCheck®, but you still don't know the whole story.
As good as AutoCheck is at reporting major problems, they won't know the service history of a vehicle. Is this the car that's going to drag you into the shop for repairs every week? Did the last owner change the oil every 4,000 miles, or every 14,000 miles?
The New vs Used car buying advantage would have to once again go to the new car being the better buy. Sites like Edmunds.com make it very easy to get free quotes for new vehicles. Fill out their quick quote form and instantly see the best prices from dealers in your local area.
Factory rebates are exclusively for new vehicles, so the clear cut New vs Used car buying advantage would go to new vehicles. Rebates can be useful not only as a price reduction, but can also make it easier to structure a loan for a lender when there is negative equity from a trade in needing to be rolled into your new car loan.
Quick car buying tips: Keep an eye on rebates as Chevrolet might offer $1000 rebate on Monday, but on Tuesday be offering a $4000 rebate. Domestics will typically have rebates that do not exceed $4000 and Imports will usually not go higher than $2000.
0%, 1.9%, 2.9%, etc. are typically finance rates that only apply to new vehicles as the manufacturer can set their financing however they like as an incentive to consumers. This has not become as a big a factor as it once was as many lenders are now offering rates in the 3's for near new vehicles.
Some dealerships will run promotions or have sales where they offer some special rate to qualified buyers, let's say 0%, on used vehicles, but what they are doing is actually buying down the rate with profit from the sale of the vehicle. Essentially, you the customer are paying to buy down that rate.
The New vs Used car buying advantage would definitely go to the new car as being the better buy, but as mentioned this isn't as big an advantage as it once was.
Both new and used cars can be leased, but truthfully I have yet to see a used car lease that makes sense. Leasing is an excellent way to avoid that dreaded negative equity auto loan. Leasing also allows you to drive a new car more frequently, two to three years is about average.
Quick car buying tips: Negotiate a lease the same way you would a purchase.
The clear New vs Used car buying advantage goes to a new car as the best buy here.
Buying a used car certainly has it's advantages here as some of the depreciation has already been absorbed by the prior owner. The average new car will depreciate between 20-30% (from MSRP) in its first year on the road. This is why it is so important to negotiate a great deal for yourself.
As mentioned before it is so important to make dealers compete so that you can buy for a rock bottom price. Get your Free Price Quotes at Edmunds.com and get up to 5 competing quotes fast from local dealers.
The slight New vs Used car buying advantage goes to the used car as being the best buy. Again, much of this depreciation can be avoided by keeping on eye on the factory rebates and making dealers compete.
It's certainly going to be cheaper (it should be anyway) to buy a used car that is similar to a brand new one, but with some miles on it. The tricky part here is determining how important the aspects mentioned above are to you. A cheaper price, but no factory warranty, no special financing, uncertainty of its history, etc. must be considered.
The clear New vs Used car buying advantage goes to the used car as the best buy here, but that is strictly from a price to price comparison and not factoring the other important aspects.
New vs Used Car Buying Summary
Of the eight areas covered above, buying a new car was the best buy in six areas and a used car had the edge in two categories. Assuming you can afford a new vehicle, then I'd have to say that would be your best bet the majority of the time.
Don't get me wrong used vehicles certainly serve there purpose and the areas that the used car had the advantage in our new vs used car match up, were big ones. Even with only two categories those may be enough to swing your vote in the used cars direction.
Overall it seems a new car gives you more control throughout the car buying process and the ownership cycle.
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