Most people like that ‘new car smell’; but let’s be honest, it’s going to fade over time. And eventually that shiny, perfect, pristine vehicle starts to have its share of dings and dents, frayed carpet and worn wipers, coffee stains and pet dander. So the question is: Should you always start out with a new car that depreciates the minute you drive it off the lot or should you look to save money over time by buying a used car instead?
Which car you choose depends on how you like to roll. Here are a few tips and facts that may help you decide.
New car depreciation
Maybe this isn’t something you figured on: A new car loses 20% of its value as soon as you buy it. Translation: If you buy a car for $30,000, you’ll only get around $15,000 when you sell it three years later. Total loss: $15,000 in depreciation.
Used car depreciation
Used car depreciation is generally much less than that of a new car. For example, if you buy a three-year-old car for $15,000, you could sell it three years later for $10,000. Total loss: $5,000 in depreciation.
OUTDATED USED-CAR STIGMAS
Nowadays, you can get used to owning a used card that goes the distance: It’s not unusual for some cars to hit more than 100,000 miles before needing major repairs.
Every car — new or used — requires routine maintenance like brake jobs, tire rotation, and oil changes. But today’s cars allow you to drive much farther in-between routinely scheduled maintenance visits.
Knowing the advantages of both new and used cars could help put the brakes on a wrong decision.
Purchasing a new car means you can expect more financing options, the peace of mind that comes from reliability backed by a factory warranty, and advanced technology that makes driving easier and more enjoyable. And let’s not forget the prestige factor: Used cars just don’t have the same cachet as a never-been-driven car that just glistens with newness.
The advantages of owning a used car include lower car insurance rates and cheaper registry renewal rates. In addition, you can also shop in a higher class of cars seeing as you’ll be saving 30% more, which means you can venture into the luxury car lane. And when all is said and done, a used car can translate into less stress: If someone dings your car door it’s not nearly as deflating as taking a hit on an absolutely flawless new car.