auto

Should I buy a new car or a used car?

Tara Baukus MelloDear Driving for Dollars,
My friends say I should buy a used car because of the depreciation when buying a new car. Still, I'm inclined to buy a new car because I keep them until they absolutely wear out. I also don't have to worry about getting stuck with someone else's problem that they traded in. What's your opinion?
-- Mike

Dear Mike,
Your friends have a good point about depreciation, which is typically in the thousands of dollars in the first year of ownership. However, you have a good point of the peace of mind that comes with knowing you are the first owner. In addition, new car owners get the full manufacturer's warranty, whereas buying a used car usually results in fewer miles on the manufacturer's warranty or no warranty at all (unless you buy a certified preowned car).

Because you keep your cars for a long time, depreciation really isn't a factor that needs to affect your purchase decision because you won't be trading in the car. Keep in mind that with a new car, it's easy to be upside-down in your car loan after depreciation.

Depreciation also could affect your car insurance payout in the event of a total loss if the car is still relatively new. Because of those factors, be sure to follow Bankrate's 12 tips for buying the right car in 2012.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

 

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Tara Baukus Mello

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