Should you buy 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 that provide objective and original 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 such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this site are from companies that compensate us. This compensation can affect the way and when products are featured on the site, such as the order in which they appear in the listing categories in the event that they are not permitted by law for our loan products, such as mortgages and home equity and other home loan products. However, this compensation will not influence the content we publish or the reviews you see on this site. We do not include the vast array of companies or financial offers that may be available to you. Peter Cade/Getty Images

6 minutes read. Published December 01, 2022

Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the details of borrowing money to buy an automobile. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are committed to helping readers feel confident to take control of their finances by providing concise, well-researched and accurate information that breaks down complex topics into manageable bites. The Bankrate promises

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If you have questions about money. Bankrate can help. Our experts have been helping you manage your finances for more than four decades. We are constantly striving to provide our readers with the professional advice and tools needed to be successful throughout their financial journey. Bankrate follows a strict , so you can trust that our content is truthful and precise. Our award-winning editors and reporters produce honest and reliable content to help you make the right financial choices. Our content produced by our editorial staff is factual, objective and is not influenced from our advertising. We’re open about how we are capable of bringing high-quality content, competitive rates, and practical tools for you by explaining how we make money. is an independent, advertising-supported publisher and comparison service. We are compensated for the placement of sponsored products and, services, or when you click on specific links that are posted on our website. This compensation could impact how, where and when products are displayed within the categories of listing in the event that they are not permitted by law for our mortgage, home equity and other products for home loans. Other elements, such as our own rules for our website and whether a product is available within the area you reside in or is within your own personal credit score can also impact the manner in which products appear on this site. While we strive to provide the most diverse selection of products, Bankrate does not include the details of every credit or financial product or service. It’s the choice that millions of car owners make every year: Should you buy a brand-new ride or choose to purchase an older vehicle in order to cut costs? Making the decision between that brand-new car smell or a used car comes down to more than just cost -and it’s a significant aspect. The cost of a new car is $716 per month while used averages at $526, according to Experian’s for the fourth quarter of 2022. If you are trying to save money on your initial purchase, a pre-owned car is a good choice. However, you must consider the price over the duration of ownership, which includes the maintenance as well as repairs. It could be that buying new is the best option for your budget. Key takeaway

A new purchase is an excellent option if you require the most recent features as well as lower initial maintenance costs. Buying used might fit better when you’re willing to sacrifice some features to lower the initial purchase as well as insurance.

Compare the costs of new and. used cars There are options for scouting the best deal, brand new or pre-owned. There are new cars available at a local dealership or by searching on sites such as or Edmunds. Used cars are offered through dealerships, but you can also find them — potentially cheaper -via independent dealers as well as private-party sellers and superstores such as . In general used vehicles are more affordable than new cars. However, both have risen dramatically in cost over the past few years. New car loans have increased from a monthly median of $554 in 2019 to $667 in 2022. That’s which is an 18.5 percent difference. Used cars also saw an astronomical increase from $391 to $515 and which is a 27.4% difference. To best prepare for the cost of owning a careither used or new — and can give you an idea of the cost of buying and maintenance costs for five years. Here’s a breakdown of the price from Edmunds for a brand-new Honda Accord versus a used one. New 2022 Honda Accord EX-L

Refurbished 2017 Honda Accord EX-L

The typical listing price



Estimated monthly payment



Estimated first year of ownership maintenance expenses


1 371 monthly installments are built upon the average rates of interest for both new and used vehicles as of Q1 2022 and a 60 month period. Maintenance and repair costs in the first year of ownership are according to Edmunds. Price shouldn’t be the only thing that you take into consideration when selecting an automobile. It is also important to consider depreciation, safety features, reliability and your preferences. Considerations when buying a new car. Buying a brand new car will require less maintenance that is based on the most recent technology. The advantages of buying a new car comes with a variety of options that you are able to choose when you find the right dealership. Customization: The primary benefit of buying a new car is that you can get it customized to suit your needs — you can select the color and style you like and add any additional features that appeal to you. Technology advancements offers practical benefits also — you’ll get a car that is equipped with the latest technology and safety features. Better interest rates: With the purchase of a brand new vehicle, you are more likely to receive the best interest rate on an auto loan as opposed to a used car purchase typically by a couple of percentage points. Reliability: You don’t have to contend with any potential issues with your mechanical system when purchasing a brand new. In addition, you can limit the amount you spend on repairs and maintenance in the initial year of your ownership. The disadvantages of buying a new car purchasing a brand new car is more costly and has a few disadvantages that could eat away at your pocket. The cost is higher new cars are typically hundreds of dollars more expensive than their older counterparts, which can cause a down payment or monthly loan payment more expensive to pay for. Depreciation: There’s also the issue of to contend with , or the speed at which your vehicle loses value. The saying goes that new cars lose value as soon as they leave the lot. New vehicles lose 20% of their value during the first year, and depreciation is continued over at least 10 years following the purchase. Higher insurance costs new cars typically cost more to insure because of the higher risk of theft, higher value , and other elements. If you do choose that it is the best option for you, you should think about and consider . Timing your car purchase carefully will help you cut down on initial costs. Things to consider when purchasing used cars typically come with less cost and appreciate more slowly, however they also have other flaws to look out for. Benefits of purchasing used a used vehicle, you can reduce the cost of your monthly installment, insurance and other charges. Plus, depreciation will likely occur at a slower pace. Have a look at the following benefits less expensive: Used vehicles’ primary benefit is that they’re generally more affordable than their brand new counterparts. The same model you want a few years old can save you thousands of dollars. Reduced insurance costs and fees: Many pre-owned cars carry less titling, registration and sales taxes. You could save money both on the lot and over the course of the car’s lifespan. A slower depreciation rate: Older vehicles also appreciate slower. Instead of losing 20 percent of their value within its first few years of ownership the car that is three years old will likely only lose around 10 percent. A negative experience with buying used might make you adjust your wish list for your next ride, research the car’s history and invest additional funds to keep the car in good condition. Making compromises: You will need to look for the style, color and you desire. Even then you could have to make compromises. The car market is extremely competitive, and you may not be able to check every checkbox. Car history: You will be required to verify the car’s maintenance records to ensure you know that previous owners was able to take good care of the vehicle. It’s advisable to bring the car to a trusted mechanic for a routine checkupfor example, a brake test and engine test before closing any deal. It is possible to shell out around $100 for the services of a mechanic, but it is well worth it. Costs for maintenance will increase even if the vehicle is in decent condition, a used car will require more repairs and maintenance in the future. This could reduce the savings you get from the initial purchase, so be sure to consider your long-term budgeting when selecting new or used. If you’re trying to lower the cost of your initial purchase, a pre-owned car is a great option. But , you’ll have to consider the costs throughout the duration of ownership — including repairs and maintenance. Certified pre-owned options If you’re thinking of purchasing used, but aren’t sure about relying on the history of the vehicle it’s an excellent choice. A certified used car is a used car that has been subjected to a thorough examination by the dealer or manufacturer. These cars are an intermediate between brand new and used cars in terms of cost upfront as you’ll be charged for the inspection. This certification adds value for a driver who wants the security of a car that is in excellent condition without the expense of a brand new car. Which is the best way to decide whether to buy a new or used car Deciding between a new or used car will come down to factors including factors like your budget and tastes and requirements. Take into consideration these factors when deciding the type of vehicle that is right for you. Budget Multiple costs are often less expensive when you purchase an older vehicle instead of buying a brand new one. Everything from the to dealer fees will be less expensive when you purchase an older vehicle. Based on the car you pick the cost of buying it is usually lower for a used vehicle. If you are calculating the numbers to figure out how much car you can afford take a look beyond the monthly installment and insurance. Include annual registration costs, fuel expenses maintenance and repairs. Bells and whistles One of the benefits of buying a new car is that it will include modern technologies and safety features. What’s more, if being capable of choosing a particular colour or design of the interior is important to you, a new car purchase will make this easier. If you are buying a used vehicle you might have to spend a long time searching to get exactly what you want. But, the benefits of selecting the most suitable tire package, sound system or seating might not be worth the cost-savings of skipping these accessories and instead purchasing second-hand. If you’re concerned regarding the security of the vehicle you’re looking at using the tools on the site to verify its safety ratings. Maintenance needs An older model may have higher maintenance costs, and this is a crucial consideration when you’re on a tight budget for your household. The majority of the maintenance involved with a new car is covered by warranty. But if you’re leaning toward a used car that’s no longer covered under warranty, this isn’t necessarily a deal breaker. It’s possible to get the extra protection you require. The average extended warranty cost roughly $1,480, but it is possible to pay much higher or lower, depending on the model of your car and the coverage you select. How to find the best price on your vehicle, whether you decide to buy either used or new, you must remember that conducting a thorough research on the car is the most important factor in . Research should include checking the model’s safety record along with the cost of insurance and the cost-to-own for five years. Try to help make a decision. You should also take the time to test-drive several vehicles and compare prices with a few dealers, getting quotes from several . Ensure that you get the lowest monthly payment and the most competitive financing terms to ensure that you keep more of your hard-earned money in your pockets. The bottom line Deciding between new and used is a matter of balancing to many factors, including your concerns around depreciation, budget, decision to purchase certain features and how long you plan on having your car. If you’ve got a vehicle in mind, shop around prior to heading to the dealership for the best deal. Find out more


This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ins and outs of securely taking out loans to purchase a car. Written 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 readers gain the confidence to take control of their finances with clear, well-researched details that cut complicated topics into digestible pieces.

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