New vs used cars

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Deciding whether you should buy a used or new car? You’re not alone and you might even change your mind a couple of times. According to an industry study, 46% of shoppers who contact a dealer on a new car actually end up buying used! And get this, over 55% of people who contact a dealer about a new car end up buying from a different manufacturer.

pros and cons of buying used and new

While we can’t tell you what kind of car to choose, we can certainly help make the process a little easier. For example, we’re going to give you the pros and cons of a new, certified pre owned used car. We’re also going to explain the difference between certified pre owned and dealer certified. Alright, we’re not going to break this thing down for nothing.

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Now that we dropped that completely irrelevant Outkast lyric, let’s explore the benefits and shortcomings of buying new and used.

Buying brand spanking new

Buying a brand new car is exciting and sometimes it can be easier than buying used. There is significantly less markup on a new vehicle so there isn’t much room, if at all, for negotiation on price. That shouldn’t stop you from trying our tips for haggling at the dealer, though! And whether it’s cash back or free oil changes for life, manufacturers and dealerships provide plenty of incentives to get you behind the wheel of a new car.  Not to mention that brand-new warranty seems pretty reassuring when it covers anywhere from 3 to 10 years and up to 100,000 miles in some cases.

A brand new car is totally customized to the buyer’s specifications with all the bells and whistles a buyer wants (or doesn’t want). Newer cars also tend to be safer and more efficient than older cars. The Washington Post reported cars have become more efficient every year since 2004 so buying a new car will net you some of the best gas mileage on the road. New cars also have the latest technology which is a great thing for early adopters, but it is often terrible for those who prefer dials and knobs over touch-screen displays.

Pros:

  • 1-Owner
  • Buyer Incentives
  • Warranty
  • New-Car Smell
  • Roadside Assistance
  • Latest Technologies

Cons:

  • Price
  • Insurance Premium
  • Depreciation
  • Unknown reliability
  • Latest Technologies

Buying certified pre owned

CPO or certified pre owned is the next-best thing to buying new. CPO cars have to pass an inspection from a manufacturer-trained technician and they are sold with the existing new car warranty. In other words, you’ll have that same new-car reassurance so if mechanical failure does happen, you’re covered. Depending on the brand, an extended warranty can be bought as well. Learn more about the best certified pre owned programs here.

An added benefit of buying CPO is the option to finance. Sure, you could finance a non-certified used car too, but if you’re financing an older used car, you’ll be looking at some crazy interest rates; see buy-here-pay-here stores. You can also learn more about how financing works here, but in a nut shell – you need to put down a certain amount of money towards a car you want to buy and then make monthly payments.

Some independent dealers might sell certified cars, but these are not certified pre owned from a manufacturer. Only a franchise dealership can sell certified pre owned. You know they’re a franchise dealer if an automaker is in their name like Harry’s Honda or Kris Kringel Chevrolet.

Pros:

  • Value
  • Existing Warranty
  • Roadside Assistance

Cons:

  • Price
  • Only Sold at Franchise Dealerships
  • Insurance Premium

Buying used

The process to buy a used car is, well, a process and you will probably want to read this before buying a used car so you know what you’re getting into. It can be time consuming to drive from one private seller or dealer to the next and feels like a second job. Thing is, buying used will usually save you a ton of money instead of buying CPO or brand new. So how much money can you save? Well, CNN reported buying used can save you anywhere from 30% to 40% versus a new car.

Sure, new cars can be totally outfitted with whatever a buyer wants, but is it worth the 40% markup? It’s also important to consider the larger variety in used cars. If you’re looking for a specific package or trim, you might find it was discontinued and only available in an older model year. Expanding a search to include used cars opens up a massive number of options and packages available. Not to mention, used car parts are generally cheaper and more plentiful than parts on a new car (unless you are picking up a used Delorean).

Unlike new cars or even certified pre owned, a used car more than five years old has a track record of being reliable or not. Take a look at our study on the least reliable car brands. Shoppers will have a better idea of what to expect when buying an older car and the common problems to ask a dealer or previous owner. Depending on the used car, insurance premiums will be lower than a new car. Added savings!

Keep in mind a used car will not be perfect. The older the car, the more likely it is to have scratches and some dents. It may have even been in some accidents according to the vehicle history report, but that doesn’t need to be a deal breaker. Make sure to have a mechanic inspect any used car before you buy to make sure it is safe, regardless of what it says in the vehicle history report. As you probably know (or should know), vehicle history reports aren’t always accurate. And remember, if you really want that new car smell, buy an air freshener.

Pros:

  • Price
  • Selection
  • Insurance Premium
  • Cheap Replacement Parts
  • Known Reliability

Cons:

  • Wear-and-tear
  • Interest Rates (if financing)
  • Unknown vehicle history

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Written by Max Katsarelas

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