The National Automobile Dealers Association says that the average person owns 13 cars in their lifetime. The price for each car averages about $30,000. Now, if you purchased each of these cars used when they were about three years old, you would end up saving almost $130,000 in your lifetime.
Used car advantages
You save on financial costs while someone else takes the depreciation hit on the car. You can also often find a late-model used car priced at half the cost of a new one. Pre-certified dealer programs usually offer strong warranties too. In a few years, you may be able to sell the car for almost the same price you paid for it. You can also benefit from good financing options from a credit union or a bank.
Used car disadvantages
The biggest issue you could face is that the used car may not be as reliable as a new car. You may have to spend on repairs and parts. You may not learn how the previous owner treated it or why they sold it. You will also not get to choose the color of the car, its features and may not have the option to buy one with a better history or fuel-efficiency.
New car advantages
New cars are considered to be in mint condition. So you don’t really have to worry about its reliability. You will also find it easier to figure out the right cost of a new car, even if you have to negotiate for the price. Car manufacturers are always offering incentives to excite customers. New car loans offer enticing interest rates, so you may even end up saving thousands of dollars on the sticker price. A newer car also has the latest safety, entertainment, and efficiency technologies.
New car disadvantages
The biggest disadvantage of a new car is the money you lose on it the moment you drive it off the lot. The most depreciation on a car also occurs in the first two to three years. It means you’re throwing away thousands of dollars that you’ll never get back. Insurance costs for newer cars are also higher as their replacement values are also higher.