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Should I Buy A New or Used Car? Car Buying Tips from the Experts

By Vast Bank on 05.18.2021

It’s the ultimate car-shopping dilemma: do you spring for the brand new model with all the bells, whistles, and warranty guarantees, or choose a used car with an unknown history? Which option costs more in the long run? The answer may surprise you. 

Here are the top concerns buyers have when it comes to deciding between new and used vehicles, and our car buying tips to help you make the right pick.

“I need something reliable.”

The auto manufacturing industry has made great strides in producing cars, trucks, and SUVs with long lifespans and minimal mechanical issues. The average lifespan of a vehicle has increased - seeing 100,000 miles on the odometer is no longer shocking. It’s easier than ever to find a used car with plenty of life left in it and no major repair bills on the horizon. 

“I can’t spend a fortune on maintenance.”

Spoiler alert! You’re going to spend a comparable amount on maintenance whether you purchase a new car or a used one. While a used car might come with a to-do list, new cars often require more expensive parts and service through specialized automotive centers. However, factory warranties can offset these costs in new cars. 

“Don’t new cars depreciate?” 

Oh yeah. A LOT. A new car loses 20-30% of its value just after it is purchased. Kelley Blue Book’s cost of ownership calculator gives an estimate of the total cost of a new vehicle five years from the purchase date, including depreciation. The figures are eye-opening!  However, some cars hold their value better than others. Do a little research so you don’t end up blindsided. This occurs when you owe much more on your vehicle than it’s worth. 

If you do select a new vehicle, you may want to include gap insurance. Gap insurance will pay for the difference between your loan amount and the value of the vehicle if it’s totaled or stolen. 

“The new car incentives are pretty tempting!” 

Automakers do sweeten the deal when it comes to brand new vehicles. Cash rebates and killer financing terms (like super-low interest rates) are a couple of methods to encourage new vehicle purchases. A little research and math should help you figure out if these incentives put the new vehicle’s value on par with one that is a year or two old.

With the right tips on how to buy a new car, you can be empowered to make informed, confident decisions at the dealership. Whether you leave the lot in a fully loaded SUV with a single-digit odometer, or in a reliable used sedan with 50k miles, you’ll enjoy your purchase for years to come. Happy shopping!

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