New Vs. Used Car
EASY MONEY>VERSUS
New Vs. Used Car
It’s time to buy a car. Should you get a used car, otherwise known as second-hand or the better-sounding pre-owned vehicle, with the major price reduction, or a brand new car, with its fresh-from-the-lot smell? Here’s our take:
| New Car | Vs. | Used Car |
| Definitely higher | Price | At least 20% lower, even more for older cars |
| Compared to a much older model, higher; otherwise it’s a lot less | Features/Price Ratio | More features for a similarly-priced brand new car |
| Dealers of car manufacturers | Sold by | Used car dealers, buy-and-sell brokers, private owners, banks with repossessed cars |
| 1. Less maintenance 2. Under warranty 3. Fewer breakdowns 4. Higher resale value 5. Lower financing rate 6. More dealer’s incentives 7. Newer features |
Advantages | 1. More choices 2. Large portion of depreciation paid for by previous owner 3. Lower price 4. Just like new (especially for demo models and those used briefly by car dealer executives) |
| 1. Much higher price 2. Value drops by 30% in the first two years due to depreciation |
Disadvantages | 1. No warranty (unless it’s certified pre-owned, which is more applicable for luxury cars) 2. More repairs and maintenance 3. More likely to turn out to be a lemon 4. Shorter financing period and higher rate 5. Hassle of transferring title |
