When it comes time to buy a car or truck, most people struggle with an important question-do I buy new or used? There are pros and cons to both choices, and serious consideration should be taken to be sure you do what you feel is best. Below are some things to think about when deciding on which path to choose.
New cars have an obvious upside. For one, since they are brand new they have almost no miles on them. Mileage is an important piece to the car buying puzzle. The lower the miles, the more use you will get from the car (or if you will trade it in a few years later, the lower mileage will net you a higher trade in value). Also you know that there have been no accidents in the car, or a previous owner who may have neglected vehicle maintenance. Warranties on new cars are also typically better than used car warranties, which leads to less maintenance costs.
The big downside is that, according to www.msmoney.com a new vehicle’s value tends to drop by approximately 40% over the first three years of ownership. This is almost half of the value of your car before your loan is typically paid off. Also, the price of a new car is often much higher than a used car, and there is no real return on your investment.
Used cars have many upsides to those who perhaps cannot afford their ideal car or truck if it is brand new. Prices often drop on used cars and you can get more for your money if you buy used. There are deals to be had if you don’t mind purchasing a vehicle with some mileage on it. For instance, according to www.cars.com the MSRP on a 2010 Cadillac CTS-V was $60,720. When searching cars.com I found a used 2010 Cadillac CTS-V for $46,879 with only 14,501 miles on it. That is a significant drop in price for 14,500 miles. There are also “Certified Pre-Owned” vehicles available. The manufacturer validates that the vehicle is in a certain condition based on a thorough inspection conducted before it is put out on the lot to be sold.
The downside to used vehicles can be that you do not know who owned the vehicle and how it was maintained. The dealer may say that it was owned by a little old lady who kept it in her garage, but in reality we have no way of knowing if that is true. There are websites like www.carfax.com that can tell you how many owners a vehicle has had or if it was in an accident, but it can’t tell you if the car was beaten on, or if all of the scheduled maintenance was performed.
Ultimately the choice lies with the buyer, and he or she must do what is best for them. Are there any other pros and cons you could add to the list? If so add them to the comments below.