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Do you want to purchase a used or new car? Part Of Buying a Car In this series Buying a Car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by providing you with interactive financial calculators and tools, publishing original and objective content. We also allow users to conduct research and compare data for no cost to help you make informed financial decisions. 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 products that are advertised on this site come from companies that compensate us. This compensation may impact how and where products appear on this website, for example the order in which they may appear in the listing categories, except where prohibited by law. Our loan products, such as mortgages and home equity, and other home lending products. But this compensation does not influence the information we provide, or the reviews that you read on this site. We do not contain the entire universe of businesses or financial offers that may be open to you. Peter Cade/Getty Images

6 minutes read. Published on December 1, 2022.

Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the ins and outs of securely borrowing money to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping their readers feel confident to take control of their finances by providing precise, well-researched, and well-written information that breaks down otherwise complex topics into manageable bites. The Bankrate promises

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They ensure that what we write will ensure that our content is reliable, honest and trustworthy. We have loans reporter and editor focus on the areas that consumers are concerned about most — the different types of lending options and the most competitive rates, the most reliable lenders, ways to repay debt, and much more. So you can feel confident when investing your money. Integrity in editing

Bankrate has a strict policy , so you can trust that we put your interests first. Our award-winning editors and journalists create honest and accurate information to help you make the right financial decisions. The key principles We value your trust. Our mission is to provide our readers with accurate and unbiased information. We have established editorial standards to ensure that happens. Our reporters and editors thoroughly fact-check editorial content to ensure the information you’re receiving is true. We keep a barrier with our advertising partners and the editorial team. The editorial team of Editorial Independence Bankrate does not receive compensation directly by our advertising partners. Editorial Independence Bankrate’s team of editors writes for YOU the reader. Our goal is to give you the most accurate advice to help you make smart personal finance decisions. We follow the strictest guidelines in order to make sure that content is not affected by advertisements. Our editorial staff receives no directly from advertisers, and all content is verified to guarantee its accuracy. So when you read an article or reviewing it is safe to know that you’re receiving reliable and reliable information. How we make money

There are money-related questions. Bankrate has the answers. Our experts have been helping you master your money for more than four decades. We strive to continuously provide our readers with the professional guidance and the tools necessary to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct standard of conduct, which means that you can trust that our content is honest and accurate. Our award-winning editors, reporters and editors provide honest and trustworthy information to assist you in making the best financial decisions. The content we create by our editorial staff is objective, factual and is not influenced by our advertisers. We’re honest regarding how we’re capable of bringing high-quality information, competitive rates and helpful tools to you , by describing 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 or services, or by you clicking on specific links on our site. This compensation could impact how, where and in what order products appear within listing categories and categories, unless it is prohibited by law for our mortgage or home equity products, as well as other home lending products. Other factors, such as our own proprietary website rules and whether a product is available in the area you reside in or is within your personal credit score may also influence the manner in which products appear on this website. Although we try to provide a wide range offers, Bankrate does not include details about every credit or financial product or service. It’s the decision millions of car owners make each year: Do you purchase a brand-new car or go with an older vehicle to save money? The decision between a brand new car’s smell or a pre-owned vehicle is more than price- but it’s an important factor. New cars cost $716 per month, while the used vehicles average $526, according to Experian’s for the fourth quarter of 2022. If you’re looking to reduce the cost of your first purchase, a second-hand vehicle is an excellent option. But , you’ll have to think about the price over the duration of ownership — including maintenance and repairs. It could be that buying new is the best option to save money. Key takeaway

New is often the best option if require the most recent features as well as cheaper initial maintenance costs. A used purchase might be better in the event that you’re willing to compromise some features to lower the initial purchase as well as insurance.

Compare the costs of new or. used vehicles There are options for scouting out your purchase, whether it’s brand-new or secondhand. There are new cars available at local dealers or search on websites such as or Edmunds. Used cars can be found at dealerships, however you can also locate them (which could be cheaper)- through independent dealers and private-party sellers, or through superstores such as . In general used vehicles are more affordable than brand new ones. However, both have risen dramatically in price over the last few years. The cost of new cars has risen from a monthly median of $554 in 2019 to $667 in 2022, which is an 18.5% difference. The used cars saw the most dramatic jump, from $391 to $515, which is a 27.4 percent difference. In order to be prepared for the expense of owning a vehicle -either used or new — and can give you an idea of costs for purchase and maintenance costs for five years. Here’s a price breakdown of Edmunds for a brand new Honda Accord versus a used one. New 2022 Honda Accord EX-L

Used in 2017 Honda Accord EX-L

The typical listing price

$35,338

$22,895

Estimated monthly payment

$668

$449

Estimated cost of the first year of maintenance expenses

$140

1 371 monthly installments are built on the average interest rates for new and used cars as of Q1 2022 and a 60-month duration. Repair and maintenance expenses for your first year as a new owner are according to Edmunds. Price should not be the only thing you consider when selecting an automobile. It is also important to consider depreciation, safety features, reliability as well as your own preferences. Things to consider when purchasing a new car. Buying a brand new vehicle is a less-maintenance investment in the newest technology. Benefits of purchasing a new car comes with a variety of options — many of which you are able to choose if you can find the right dealer. Customization: The primary benefit of buying a new vehicle is that you can get it fitted to your personal preferences and preferences. You can choose the color and style that you want and request any add-ons that you like. Modern technology is a practical benefit as well. You will drive off with the latest technology and safety features. Better interest rates: With an investment in a brand-new car it is more likely to secure an interest rate that is better for an auto loan than with an used vehicle purchase typically by a couple of percentage points. Reliability: You won’t have to worry about any undiscovered mechanical issues when you buy new. In addition, you can limit your spending on repairs and maintenance during the first few months of owning. Cons of buying new Unfortunately purchasing a brand new car is more expensive and comes with a few downsides that can dent your wallet. The cost is higher: New cars are often many thousands of dollars more expensive than older counterparts, which can make a down-payment or monthly loan payments more difficult to manage. Also, you’ll have depreciation to deal with the speed at which your vehicle is worthless. As the saying goes, new cars are worthless when they leave the lot. That means that new cars lose 20 percent of their value within the first year, and depreciation will continue throughout the first 10 years of ownership. Costs for insurance are higher Newer cars are generally more to insure because of the higher risk of theft, greater value , and other factors. If you decide that is the right option for you, make a make sure you plan your budget and be aware of . It is important to plan your purchase in advance and can reduce some upfront expenses. Things to consider when purchasing used cars typically come with the lowest price and are more depreciating, however they also have other flaws to be aware of. Pros of buying used With an used vehicle, you can reduce the cost of your monthly payments, insurance, and other charges. Plus, depreciation will likely occur at a slower pace. Consider the following benefits: Less expensive The primary benefit is the fact that they’re generally more affordable than their brand new counterparts. Getting the same model you’re looking for a few years old can save you some thousand dollars. Lower insurance costs and fees A lot of pre-owned cars have lower fees for titling and sales tax. It can save you money on the sale and throughout the car’s life. Slower depreciation: Used cars also depreciate slower. Rather than losing 20 percent of their value within its first few years of ownership a three-year-old car would likely just lose 10 percent. The negatives of purchasing used could require you to adjust your wish list when you are ready to purchase your next car look up the car’s history and spend extra funds to keep the car in good condition. Making compromises: You’ll need to look for the color, style and design you’re looking for. And even then you might need to compromise. The auto market is extremely competitive and you might be unable to tick every checkbox. The car’s history: You’ll have to also check the maintenance history of your vehicle to ensure it was owned by the original owner who was responsible for the vehicle. It’s advisable to bring the vehicle to a trusted mechanic for a thorough check-upwhich includes a brake inspection and engine check before concluding any deal. It is possible to pay around $100 for the mechanic’s efforts however it’s worth the cost. Increased maintenance costs: Even if the car is in relatively good condition an older car will require more maintenance and repairs over time. This could eat into the savings you get from your initial purchase, so you should consider your long-term budgeting when selecting new or used. If you are trying to lower the cost of your initial purchase, a pre-owned car is an excellent option. But you’ll need to consider the costs throughout the duration of ownership — including repairs and maintenance. Certified pre-owned options If you’re considering purchasing used, but aren’t sure about relying on the car’s past then a certified pre-owned vehicle is an excellent option. A certified pre-owned car is one that has undergone a complete inspection by either the dealer or manufacturer. They are an equalizer between used and new vehicles in terms of price upfront because you’ll have to pay 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 car. How to choose whether to buy a new or used vehicle The decision between buying a brand new or used car comes from a combination of financial considerations and your tastes and preferences. Consider these issues when choosing which one is best for you. Budget multiple costs are usually lower when you buy an used car rather than a new one. Everything from the to dealer fees are less costly when you purchase a second-hand vehicle. The vehicle you pick the cost of buying it is usually lower when you buy a pre-owned car. If you are calculating the numbers to determine how much car you can afford, look beyond the monthly installment and insurance. Include annual registration fees, fuel costs as well as repairs and maintenance. The bells and whistles one benefit of purchasing an all-new car is that it’ll come with modern technologies as well as safety equipment. Additionally, if being able to select a specific car color or interior finish is essential to you, a new car purchase will simplify this. If you buy a used car you might have to spend a long time searching to get the exact car you want. But, the benefits of choosing the best package for tires, sound system or seating could not justify the cost savings by avoiding these extras and purchasing a second-hand. If you are concerned regarding the safety of the car you’re thinking about buying you should use the tools available on the site to verify the safety rating. Maintenance requirements A car that is older could have higher maintenance costs, which is important to consider if you have a limited budget for household expenses. The majority of the maintenance involved with a brand-new car will likely be under warranty. But if you’re leaning toward an older car that is no longer covered by warranty, this isn’t necessarily an issue. It’s possible to get the added protection you need. The average extended warranty costs about $1480, however you could spend far more or less, depending on the model of your car and the amount of protection you choose. What can you do to get the best deal on your car Whether you choose to purchase a brand either used or new, keep in mind that researching the vehicle is the most vital element in . Your research should include checking the car’s safety history as well as the insurance cost and the five-year cost-to-own. Try to help make the right choice. You should also make the effort to test drive various vehicles and talk with a few sellers and get quotes from a variety of . Make sure you are getting the lowest monthly payment and the most competitive financing terms to save more of your hard-earned money in your pockets. The bottom line Deciding between new and used cars comes down to many factors, including the concerns you have regarding depreciation, budget, your determination to have specific features, and the length of time you plan on having your car. When you’ve got a car in mind, shop around and prior to going to the dealer, make sure you get the most affordable price. Learn more

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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ins and outs of securely borrowing money to purchase cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to manage their finances with clear, well-researched details that cut otherwise complex topics into manageable bites.

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