Should I buy a new car or a used car?
Dear 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?
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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