Should I Buy a New or Used Car?

There has never been a better time for car buyers to invest, thanks to a market that is flooded with second-hand vehicles and manufacturers pushing out great deals to keep up with the competition. But, while purchasing a vehicle might sound like a straightforward process, most buyers end up asking themselves, "Should I buy a new or used car?". The answer to that question is a loaded one, with pros and cons for buying new or used cars that are worth looking at.

Statistics show that used cars consistently outsell new vehicles; in 2019, around 40.8 million used car models were sold, while only 17 million new automobiles were processed in the USA. This trend, according to data analysts, continued into 2020 with the global pandemic further increasing the number of used cars for sale in the US, due to the lockdown and quarantine of local businesses, many automakers halting production, and restrictions on public transport being put in place. These numbers show just how many people buy used vs new cars in order to save money.

Added to this, recent market surveys have also determined that used cars are becoming younger, with more consumers trading up from older, cheaper vehicles. Although this means that the used car market will show a shift towards more expensive prices, it also means around 60% of available pre-owned stock is expected to be three years old, or younger, by 2022.

If so many shoppers are opting for pre-owned, why should you buy a new car? Despite the benefits of opting for a used purchase, choosing to go brand-new has its advantages too:

• It's easier to shop around: As car manufacturers tend to have multiple dealerships, and, considering the global health scare, online shopping platforms increase in popularity, doing initial legwork has never been easier. There is no need to go out of your way to view a car, and some premium brands will even bring the car to you for a test drive.
• It's easier to pay for a new car: When buying used, you will be limited as to the number of ways in which you can pay for a car. Certain institutions won't finance cars over a certain age, which means you'll have to pay cash. New car loans may have better interest rates, and dealers also tend to offer a large number of incentives, discounts, and cash-back deals on new cars. It is also easier to compare costs when the price is semi-regulated.
• Peace of mind: Since you're shopping for a brand new car, you don't have to worry about things like wear and tear, damage, or failing parts, and there will be no need for a mechanical inspection. Most manufacturers in the USA offer a warranty on new cars for added peace of mind, too.
• New Tech: Buying the latest models in 2021 might be pricey, but it also means that you gain access to all the latest tech. This can be in the form of an advanced new infotainment system or new engine technology that improves performance or cuts down on emissions. The evolution of driver assists, safety aids, and self-driving technology has never been more evident than in the newest releases.
• New car smell: Let's be honest, there is nothing better than the smell of a new car, and for some, this is an actual selling point. There's something wonderful about a brand-new vehicle that has little to no mileage on the clock.

When it comes to buying a new car, there are a few things to keep in mind. Tips for buying a new car include doing your research on:

• The car and brand itself, as new models may be untested by rating agencies for safety and reliability
• Some brands have better resale value than others and will affect your future plans
• New cars depreciate a soon as you drive away from the dealership, so keep trade-in value in mind
• Brand-new vehicles tend to have higher insurance costs
• What financing and loans entail and what you can actually afford, all-included

There has never been a better time for buying a used vehicle. The various benefits can be summarized as follows:

Whether it's an old car or a new car, there are certain things you have to look out for before buying. Some tips for buying a used car are:

1. Set a budget: Before you even start looking for a used car, it is important to have an idea of how much you'll be able to afford. Without a budget, your finances could quickly balloon out of control - make sure you know what you are able to fork out if you're paying cash, or get pre-approval from a financial institution before starting your shopping to avoid emotional decisions - stick strictly to the figure you can afford. Your budget will determine what kind of vehicle you can get; comparing what is available under 20,000 dollars versus what there is under 10,000 bucks will be quite different.
2. Shop around: Do your research before you even go to a dealer or private seller. There are numerous ways to shop, with online platforms being one of the best places to buy used cars, especially in the wake of the global pandemic. You'll be able to see trims, mileage, history, and features available before setting foot out the door.
3. Compare prices: The used car market is a great place to find a bargain, so comparing prices is a must. Whether you use a search engine, car finder websites or even your local newspaper, it is always best to weigh up options to ensure you get the best deal for your money.
4. Get the best trade-in value: If you have a trade-in, don't just let a salesperson tell you what you'll get for it; use services such as Kelly Blue Book. This site's car value tool will give you a great idea of what to expect.
5. Test drive: One of the simplest but most important steps to buying any car is to test drive it, especially when it comes to used cars. A test drive will reveal any squeaks, rattles, and mechanical issues if you are attentive.
6. Car history: Just because a car looks clean, has good mileage figures, and is parked at a reputable dealership doesn't mean that it will be trouble-free. Make use of services such as CARFAX to get a better idea of the car's life. Checking the title at your local DMV is also recommended. A full history of service and repairs is always a plus.
7. Recall history: It would be worth checking if the car you're after has been subjected to any recalls, and websites such as J.D. Power and the NHTSA can give you an overall picture of the reliability of certain models.
8. Get an inspection: An untrained eye can only spot so much, so it would be wise to get your potential car checked out by professionals. If a seller is not keen on the idea, then it might be a sign that there is something wrong with the car.
9. Sweet spot: Cars between the age of two and four years old are in the 'sweet spot' between depreciation and repair/maintenance outlays, and will be an excellent investment in the long-run.

There's another little secret to remember when buying a car: different times of the year will yield different prices. Did you know there are times when it is better to buy a car, and times to rather wait? It turns out that October, November, and December is the best time of year to buy a car, according to recent research. Since dealerships have sales quotas to fill, at the end of the year, prices often get lowered to draw more sales in.

Whether you buy a new or used car, there are some similarities in how you go about making the final decision. As we've discussed here, buying new cars vs. used cars requires doing some research. Remember that while the initial cost of purchase of a brand new car may be high, this is offset by lower maintenance fees - at least, in the beginning. You will spend more as time goes on and major services are required.

And, if you are still unsure about buying new vs used, here are some FAQs that may help: