Should You Buy A New Or Used Car? Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content 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 providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: On This Page
Peter Cade/Getty Images September 15, 2022 Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. It’s the choice that millions of car buyers make each year: Do you buy a brand-new ride or opt for an older car to save money? Deciding between that new car smell or a pre-owned vehicle comes down to more than just price — but it’s an important factor. Driving new costs $667 per month while used averages at $515, according to for the second quarter of 2022. If you are trying to save money on your initial purchase, a used car is a good choice. But you’ll need to consider the cost over the life of ownership — including maintenance and repairs. You may find that buying new is the better choice for your finances. Car Outline Key takeaway Buying new can be a good choice if you want the latest features and cheaper initial maintenance costs. Buying used might fit better if you are willing to compromise on some features to save on the initial purchase and insurance. Compare costs New vs used cars
There are options for scouting out your purchase, whether new or used. You can find new cars at a local dealership or by searching on sites like or Edmunds. Used cars are available through dealerships, but you can also find them — potentially cheaper — through independent dealers, private-party sellers or superstores like , or . In general, used cars are cheaper than new cars. 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. Used cars also saw a drastic jump from $391 on average to $515, a 27.4% difference. To best prepare for the cost of owning a vehicle — new or used — and can give you a sense of purchase costs and five-year maintenance costs. Here’s a price breakdown 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 Estimated first year of ownership maintenance costs $140 Monthly payments are based on the average interest rates for new and used vehicles as of Q1 2022 and a 60-month term. Maintenance and repair costs for the first year of ownership are according to Edmunds. Price shouldn’t be the only factor you consider when selecting a car. You should also weigh vehicle depreciation, safety features, reliability and your preferences. Buying a new car is a lower-maintenance investment in the newest technology. Pros of buying new
A new car comes with a range of features — many of which you get to pick if you can find the right dealership. The primary benefit of buying a new vehicle is that you can get it outfitted to your preferences — you can select the color and style you want and request any add-ons that appeal to you. There are practical advantages too — you will drive off with the latest technology and safety features. You won’t have to contend with any potential hidden mechanical problems when you buy new. Plus, the should limit your spending on repairs and maintenance in the first few years of ownership.
Unfortunately, buying new is more costly and comes with a few downsides that can dent your wallet. New cars often cost more to insure because of their higher chance of theft, higher value and other related factors. If you do decide that is the right choice for you, plan and look out for . Timing your car purchase carefully and can reduce some upfront expenses. Considerations when buying used
Used cars typically come with a lower price tag and depreciate more slowly but have other shortcomings to watch for. Pros of buying used
With a used car, you could save money on the monthly payment, insurance and other fees. Plus, depreciation will likely happen at a slower rate. Take a closer look at these key benefits below: Used vehicles’ primary benefit is that they tend to be less expensive than their new counterparts. Used cars also depreciate much more slowly. Rather than losing 20 percent of its value in the first year of ownership, a three-year-old car would likely only lose close to 10 percent. Cons of buying used
may require you to adjust your list of wants for your next ride, research the car’s history and spend extra funds to maintain the vehicle. Making compromises: You will have to search to find the style, color and you want. And even then, you may have to make some compromises. The car market is extremely competitive right now, and you may be unable to tick every box. Car history: You will also need to check the vehicle’s maintenance record to ensure that the previous owner took good care of it. It’s wise to bring the car to a trusted mechanic for a checkup — including a brake check and engine test — before closing any deal. You can expect to pay about $100 for the mechanic’s efforts, but it is well worth it. Increased maintenance costs: Even if the car is in relatively good condition, a used car will inevitably need more maintenance and repairs over time. This could eat into the savings you get from your initial purchase, so consider your long-term budgeting when selecting new versus used. If you are trying to save money on your initial purchase, a used car is a good choice. But you’ll need to take into account the cost over the life of ownership — including maintenance and repairs. Certified pre-owned options
If you’re leaning toward buying used but are hesitant about trusting the vehicle’s history, a vehicle is a great choice. A certified pre-owned car is a used car that has undergone a complete inspection by the dealership or manufacturer. These cars are a middle ground between used and new vehicles in terms of upfront price since you’ll pay extra for the inspection. This additional certification is perfect for a driver who wants the security of a car in mint condition without the price tag of a brand-new vehicle. How to choose whether to buy a new or used car
Deciding between a new or used vehicle will come down to factors including financial considerations and your tastes and needs. Consider these issues when choosing which type of purchase is right for you. Budget
Multiple costs are often cheaper when you buy a used vehicle rather than a new one. Everything from the to dealer fees will be less expensive when you buy a used vehicle. Depending on the vehicle you choose, the purchase price will also typically be less for a used car. When you crunch the numbers to determine how much car you can afford, look beyond the monthly payment and insurance. Be sure to include annual registration fees, fuel costs, maintenance and repairs. Bells and whistles
One of the benefits of buying a new car is that it will include the latest technology and safety features. What’s more, if being able to select a specific vehicle color or interior finishes is important to you, a new car purchase will make this easier. When purchasing a used car, you may have to spend a long time searching to get exactly what you want. Still, the luxury of choosing the best tire package, sound system or seating may not outweigh the cost-savings of skipping these add-ons and buying used. And if you have concerns about the safety of the vehicle you’re considering, use the tools found on the to check the safety rating. Maintenance needs
A slightly older may have higher maintenance costs, which is an important consideration if you have a limited household budget. Much of the maintenance associated with a new car will likely be under warranty. But if you’re leaning toward a used car that’s no longer under warranty, this isn’t necessarily a deal breaker. You can to get the added protection you need. The average extended warranty costs roughly $1,480, but you could spend far more or less, depending on your vehicle and the level of coverage you select. How to find the best deal on your car
Whether you decide to buy new or used, remember that researching the vehicle is the most crucial element in . Your research should include checking the model’s safety record, insurance costs and five-year cost-to-own. Try to help make a decision. You should also take the time to test-drive multiple vehicles and shop around with a few sellers, getting quotes from several . Ensure that you get the lowest monthly payment and most competitive financing terms to keep more of your hard-earned money in your pocket. The bottom line
Deciding between new and used comes down to several factors, including your concerns around depreciation, budget, your determination to have certain features and how long you plan on having your car. Once you have a car in mind, shop around and before you head to the dealership for the best deal. Learn more
SHARE: Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites.