New Car vs. Used Car Comparison

BUYING A NEW CAR Advantages Disadvantages WARRANTY: New cars typically come with a warranty that covers the cost of repairs and labor. Warranties vary with make and models. The average coverage is for 5 years or 50,000 miles, whichever comes first. DEPENDABILITY: When you buy a new car, you don’t...

BUYING A NEW CAR Advantages Disadvantages WARRANTY: New cars typically come with a warranty that covers the cost of repairs and labor. Warranties vary with make and models. The average coverage is for 5 years or 50,000 miles, whichever comes first. DEPENDABILITY: When you buy a new car, you don’t need to worry about unknown mechanical problems, previous wear, or body damage. HIGHER INSURANCE, TAXES & FEES: Taxes, and registration fees for a car are higher when the car is new. Also, used cars are generally less expensive to insure compared to a new car. CHOICE OF LATEST FEATURES & OPTIONS: With a new car you can have more flexibility to order a car with the features and options you want. INSTANT DEPRECIATION: Almost all cars depreciate but a new car depreciates the minute you buy it. A new car depreciates about 15% the day you drive it off the car dealer’s lot. HIGHER PRICE: The purchase price of a new car is higher than a used car. BUYING A USED CAR Advantages LOWER PRICE: Used cars have a lower purchase price and can be a much better value overall. When buying from private seller, one may have substantial savings when purchasing a used car. LESS DEPRECIATION: Though used cars continue to depreciate; they depreciate much slower than newer cars. Because depreciation is the loss of the value of a car, you may save a lot of money with buying a used car. LOWER INSURANCE, TAXES, AND FEES: It cost less to insure an older car, one of less value. Also, other fees and taxes are much lower. Disadvantages HIGHER LOAN INTEREST RATE: If you finance a used car, there is a higher interest rate than for a new car. Also, cars more than seven years old might not qualify for financing. LIMITED OR NO WARRANTY: If you purchase from a private seller, your car may not carry a warranty. A car dealer may or may not offer you a warranty on a used car. Extended warranties can be very expensive and are often not worth the cost. HIGHER MAINTENANCE COSTS: Because used cars have more miles on them than new cars, they are more likely to require repairs and maintenance. Depreciation is when the value of a car goes down due to wear and tear over time. Most all cars depreciate. If a car loses value (depreciates), you lose money, because it is worth less money. ©Career and Life Skills Lessons, All Rights Reserved. 5|P age