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Used car vs. new car: Join the debate

Posted Sep 05 2008, 07:17 PM by Karen Datko
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There's an interesting debate going on at Prime Time Money about whether it's smarter to buy a new or used car. Right now, used seems to be winning.

What do you think? Before you jump in, read the exchange between "PT" and contributor "J." It's instructional and highly amusing. PT also gives great tips to use whether you're buying a new or used car.

Here's a serious part, with J arguing for a new car:

PRO (J): Interest rate of 1.9%.
CON (PT): The rate may be low but your monthly payment is almost certainly going to be much higher. Not to mention off-the-lot depreciation. That's money you could be using for retirement savings or your kid's education.

Here's a funny part:

PRO: Newest safety features, such as tire-pressure monitoring and electronic stability control, as well as enough airbags to make the car practically float in the water.
CON: Airbags are for wimps. More people are injured from them than protected. (OK, I just made that one up.)

J's arguments include better gas mileage, warranty, dependability, low maintenance, and all of the latest safety features and new toys.

PT notes that when you purchase a used vehicle, you'll have less debt (and less guilt about it) and cheaper insurance (with the option of a higher deductible), and you can park it wherever without worry because it probably already has a few dings.

PT adds, "Cassette-tape player, cigarette lighter, unintentional two-tone paint job, and a free workout from the manual windows and lack of power steering. Need I say more?" (J replies that PT could get a workout if he mowed his lawn now and then.)

We agree with Mr. ToughMoneyLove, who wrote that "if you are a person that values emotion, impulse satisfaction and style, buy new. If you are a common-sense money person, buy used."

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Comments

 

I usually buy new.  I have been burnt a couple of times on so called good used cars.  I usually keep my vehicles for 10 years and do much of my regular maintance myself like oil, grease and fluid levels.  Fluid levels and other scheduled maintance are really important in getting the most out of your vehicle.  Most cars and trucks will go at least 150,000 miles or more and that's how you get the most out of your investment.  

Mike A (Posted 09.06.08 1:38 PM ) Report Abuse

I am an auto dealer. I can state that absolutely the best value is a 1-2 year old used car with low to moderate mileage.  The key is to buy cars with late in-service dates, thus the greater portion of remaining factory warranty.  Also buy only current model one-owner cars with original paint and clean carfax.  Such cars typically retail for 25 to 40 percent less than a new car that is IDENTICAL ,have IDENTICAL features, and provide IDENTICAL reliability, safety,fuel economy, and owner satisfaction. I specialize in the sale of such cars and can tell you that my clientele tend to be better educated, and more affluent than any new-car buyer. Such a car obviously attracts a more sophisticated, better informed consumer.

Greg Martin (Posted 09.06.08 1:46 PM ) Report Abuse

new car all the way. if you buy used car for cheaper, you will most likely be paying for all sorts of repairs which will add up to the cost of a new car altogether. No point in messing around with that.

katya (Posted 09.06.08 2:00 PM ) Report Abuse

I mainly buy new and pay cash.  I bought a few used ones including "certified".  I did some research 4 years ago before getting my daughter a used Taurus (1 year old with 13K mileage and still have a sound guarantee for 2 years) and at $6K less than a new one, it's been the best bargain I ever got.  There are merits to each and my advice is pay cash, otherwise you should buy a new one because of the guarantee.  Tom Paul's advice is superb.

Barry Reinhard (Posted 09.06.08 2:04 PM ) Report Abuse

I have a 1995 honda accord and I paid 3400 six yrs ago replace the engine with a 52k everything else were just fine. I drive it to work every day thats 64miles/day and compare it to my brothers pick up 6cyl. I save about $30.00 wkly. If you have enough money go ahead for a new and efficient but for now my used is a great save. Buy used if your low in cash or avoid that monthly payment. I just love it for the monent.

antonio (Posted 09.06.08 2:11 PM ) Report Abuse

Not black and white! Years ago when parts were relatively cheap and if you were a good mechanic it made sence to buy a good used car. Today parts and labor are very expensive so you might be better off buying a new economy car such as a Ford Focus. The main thing is to stay ahead of the curve financially. No long term financing! Pay cash if at all possible and maintain the car for the long term. Ten to twelve years.

craig bardell (Posted 09.06.08 4:45 PM ) Report Abuse

I prefer buying NEW, I have bought used, 1 pickup dodge kept for 1 yr. 1 sedan "Camry"  Kept for 6mths. bought a new in 1990 kept it for 12 yrs. my fault blew the engine .used engin 3K cost including instalation.

colin (Posted 09.06.08 5:03 PM ) Report Abuse

Money talks! I'm sure people will buy new if they have the money. Used if they don't. simple as that!

Will (Posted 09.06.08 5:07 PM ) Report Abuse

I believe that we should all buy used cars at this time.  We need to pressure car makers into manufacturing a car with great great gas mileage.  I also strongly feel that we need to take a look at an electric commuter car.  Yes, mileage is limited, but used as a daily commuter would save the consumer large amounts of money.  If more electric cars were around, batteries would be much better.  

If we lower our demand on gasoline, you can put your hand out with more money, because the fuel companies will not continue to raise the greedy price until more competition is in place.

Glenn (Posted 09.06.08 5:21 PM ) Report Abuse

I think buying new is a waste of money.  After always buying new cars I feel I wised up 10 yrs ago!  I recently purchased a 2005 Vibe with 22,000 miles on it.    It was previously leased for 3 yrs. so it had one owner and all the maintenance done. It still had over 6 months of the factory warranty left. I saved about $300.00 on my State excise tax, $200 on insurance and $250 on State sales tax vs. a comparible new one.  It was completely loaded and looks and drives like new! My last used car I drove for 8yrs with no regrets and several years with no payments in which I put the equivalent amount into my savings towards the next car and repairs. There are so many previously leased, low mileage cars available that to me it's a no brainer to buy used!

Joanne (Posted 09.06.08 5:35 PM ) Report Abuse

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