Do you need to buy a brand new or used car? Part Of Buying a Car In this series Buying a Car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by offering interactive financial calculators and tools, publishing original and objective content. This allows you to conduct your own research and evaluate information for free and help you make financial decisions with confidence. Bankrate has agreements with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that pay us. This compensation may impact how and when products are featured on this website, for example the order in which they appear in the listing categories, except where prohibited by law for our loan products, such as mortgages and home equity, and other home loan products. This compensation, however, does not influence the content we publish or the reviews that appear on this website. We do not cover the vast array of companies or financial offerings that could be accessible to you. Peter Cade/Getty Images
6 min read Published December 01, 2022
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the details of borrowing money to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers to manage their finances with concise, well-researched and accurate information that breaks down otherwise complicated topics into bite-sized pieces. The Bankrate guarantee
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If you have questions about money. Bankrate has answers. Our experts have helped you understand your finances for more than four years. We strive to continuously provide consumers with the expert guidance and the tools necessary to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct standard of conduct, which means that you can trust that our information is trustworthy and reliable. Our award-winning editors and reporters create honest and accurate content that will help you make the right financial choices. The content created by our editorial staff is objective, factual and is not influenced by our advertisers. We're transparent about the ways we're capable of bringing high-quality information, competitive rates and practical tools for our customers by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the placement of sponsored products andservices or when you click on specific links on our site. Therefore, this compensation may impact how, where and in what order products are displayed within the categories of listing in the event that they are not permitted by law. We also offer mortgage or home equity products, as well as other home lending products. Other factors, like our own rules for our website and whether the product is available within the area you reside in or is within your own personal credit score can also impact the way and place products are listed on this site. While we strive to provide a wide range offers, Bankrate does not include details about every financial or credit product or service. It's the decision millions of car buyers make every year: Should you buy a brand-new ride or choose to purchase an older car for savings? Making the decision between that brand-new car smell or a used car is more than just price -and it's a significant factor. New cars cost $716 per month, while the used averages at $526, according to Experian's for the fourth quarter of 2022. If you are trying to save money on your initial purchase, a second-hand car is a good choice. However, you must consider the costs over the course of ownership, including maintenance and repairs. It could be that buying new is the better choice for your budget. The most important thing to remember
A new purchase is the best option if require the most recent features as well as lower maintenance costs at the beginning. Buying used might fit better when you're willing to sacrifice some features to save on the initial purchase as well as insurance.
Compare the costs of new and. used cars There are many options to scope the best deal, it's brand-new or secondhand. You can find new cars at a local dealership or through search engines such as or Edmunds. Used cars are available through dealerships, however, you can also find them (which could be cheaper)through independent dealers and private-party sellers, or through superstores like , or . In general the case of used cars, they are less expensive than brand new ones. But both have increased dramatically in price over the last few years. New car payments have jumped from a monthly average of $554 in 2019 to $667 in 2022, an 18.5% difference. The used cars saw the most dramatic jump, from an average of $391 to $515 and which is a 27.4 percent difference. To best prepare for the costs of owning a careither used or new -it can provide a sense of purchase costs and maintenance costs for five years. Here's the breakdown of prices from Edmunds for a brand new Honda Accord versus a used one. New 2022 Honda Accord EX-L
Used 2017 Honda Accord EX-L
Typical listing price
$35,338
$22,895
Estimated monthly payment
$668
$449
Estimated cost of the first year of ownership maintenance expenses
$140
1 371 monthly installments are built upon the average interest rates for both new and used vehicles in Q1 2022, and a 60-month term. Maintenance and repair expenses for the first year of ownership are according to Edmunds. Price should not be the only thing you consider when selecting an automobile. It is also important to consider depreciation, safety features, reliability and your preferences. Things to consider when purchasing a new car. Buying a brand new car will require less maintenance with the latest technology. The advantages of buying a new car comes with a wide range of features including many that you get to pick when you find the right dealership. Customization: The main benefit of buying a new vehicle is that you can get it fitted to your personal preferences and preferences. You can choose the color and design you want and request any add-ons that you like. Modern technology offers practical benefits as well. You will get a car that is equipped with the latest technology and safety features. More favorable interest rates: When you make an investment in a brand-new car it is more likely to secure a better interest rate for an auto loan than you would with an used vehicle purchase, often by a few percentage points. Reliability: You won't have to contend with any potential issues with your mechanical system in the event that you purchase a new. Additionally, it will reduce the amount you spend on maintenance and repairs in the initial year of your ownership. Pros of buying new, buying new is more expensive and has some negatives that could cost you your wallet. Costlier: New cars are often several thousands of dollars higher than predecessors that are used, which can cause a down payment or monthly loan payments more difficult to manage. Also, you'll have depreciation to consider the rate at which your car decreases in value. According to the old saying, new vehicles lose value when you take them off the lot. that new vehicles lose 20% of their value within the first year, and depreciation continues for up to 10 years after the initial purchase. Higher insurance costs: New cars often cost more to insure due to their higher chance of theft, greater value and other related factors. If you think that this is the best option for you, you should plan and look out for . It is important to plan your purchase in advance will help you cut down on initial costs. Things to consider when purchasing used cars typically come with the lowest price and are more depreciating, but have other shortcomings to be aware of. Advantages of buying used a pre-owned vehicle, you can reduce the cost of your monthly installment, insurance and other costs. Plus, depreciation will likely occur at a slower pace. Have a look at these benefits below Cheaper The main benefit is the fact that they're generally cheaper than new counterparts. If you find the exact model you want a few years old could help you save a couple thousand dollars. Reduced insurance costs and fees: Many pre-owned cars carry less titling, registration and sales tax. You may save both on the lot and over the course of the car's lifespan. A slower depreciation rate: Older cars also depreciate much more slowly. Instead of losing 20% of its value in the first year of ownership, an older car of three years would just lose 10. Cons of buying used may make you adjust your priorities to make your next purchase and research the history of the car and put aside money to keep the car in good condition. Making compromises: You will need to look for the style, color and you want. In the end you could need to compromise. The car market is extremely competitive at the moment and you may not be able to check every checkbox. Car history: You'll have to also check the vehicle's maintenance record to make sure you know that previous owners was able to take good care of it. It's advisable to bring the vehicle to a trusted mechanic for a routine checkupfor example, a brake test and engine check prior to concluding any deal. It is possible to shell out around $100 for the services of a mechanic however it's worth the cost. Increased maintenance costs even if the vehicle is in decent condition, a used car will require more repairs and maintenance in the future. This can eat away at the savings you earn from the initial purchase, so you should consider your long-term budgeting when selecting new or used. If you are trying to lower the cost of your initial purchase, a pre-owned car is a great option. But you'll need to take into account the cost throughout the duration of ownership that includes repairs and maintenance. Certified pre-owned alternatives If you're considering purchasing used, but aren't sure about relying on the car's past it's a great choice. A certified pre-owned vehicle is a pre-owned vehicle that has undergone a complete inspection by the dealership or the manufacturer. These vehicles are considered to be an intermediate between used and new vehicles in terms of price upfront as you'll be charged for the inspection. This additional certification is perfect for those who need security from a car that is in excellent condition without the price tag of a brand new car. How to choose between a brand new or used vehicle Deciding between a new or used car comes from a combination of financial considerations and your tastes and preferences. Be aware of these aspects when choosing which type of purchase is the best choice for you. Budget multiple costs are usually lower when you buy a used vehicle rather than an entirely new model. Everything from the to dealer costs will be less expensive when you buy a used vehicle. Based on the car you pick, the purchase price will typically be lower when you buy a pre-owned car. When you calculate the numbers to determine how much you can afford for a car, look beyond the monthly installment and insurance. Make sure you include annual registration fees, fuel expenses, maintenance and repairs. The bells and whistles one advantage of buying an all-new car is that it'll come with the most recent technologies and safety features. Additionally, if being in a position to choose a specific car color or interior finish is important to you, then a new car purchase will make this easier. If you are buying a used vehicle it is possible to spend hours searching to get exactly what you want. Still, the luxury of selecting the most suitable tire package such as a sound system, seating or seating might not be worth the savings of avoiding these accessories and instead purchasing used. If you're concerned regarding the safety of the vehicle you're looking at you should use the tools available on the site to verify the safety rating. Maintenance needs A slightly older may have higher maintenance costs, and this is an important consideration if you're on a tight household budget. Much of the maintenance associated with a brand-new car is likely to be covered under warranty. However, if you're considering an old car that's not longer under warranty, it's not necessarily an issue. It's possible to get the added protection you need. The typical extended warranty is approximately $1,480. However, you could spend far more or less, based on your vehicle and the level of protection you choose. What can you do to get the best bargain on your car, regardless of whether you opt to buy a either used or new, you must remember that research into the vehicle is the most vital element in . Research should include checking the safety rating of the vehicle, insurance costs and the cost-to-own for five years. Try to help make the right choice. It is also advisable to take the time to test-drive various vehicles and talk with a few dealers by getting estimates from several . Ensure that you get the lowest monthly payments and most competitive financing terms to save more of your hard-earned money in your pocket. The main thing to consider is whether you want new and used is a matter of balancing to several factors, including the concerns you have regarding depreciation, your budget, your determination to have specific features, and the length of time you plan on having your vehicle. Once you have a car in your mind, research and prior to going to the dealer, make sure you get the best price. Learn more
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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ins and outs of securely taking out loans to purchase an automobile. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to control their finances with clear, well-researched information that breaks down otherwise complex topics into manageable bites.
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