April 2021
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Should You Buy a New or Used Car?
Make sure that your purchase is the best fit

It’s time to buy a replacement vehicle, and you have a lot of choices when it comes to things like body styles and features. Before you dive too deep into those details, you should decide if you plan on buying a new or used car.

New cars

If you really care about having the most advanced safety features and a smoother buying experience, a new car might be the way to go. Philip Reed of Nerd Wallet points out that buying a new car is a simpler process since the vehicle comes straight from the manufacturer. You can focus just on features and dealership perks instead of how previous drivers treated it. If you do choose a vehicle with issues, there are laws and warranties protecting you from high garage bills.

All of these pros come at a cost. Miriam Caldwell of The Balance reports that new cars lose thousands of dollars of value in the first two or three years you own them. Not only that, but a car’s value drops significantly just by driving it off of the dealership lot. Caldwell goes so far as to say, “Financially it does not make a lot of sense to buy a new car unless you have money you do not mind losing.”

Used cars

Used cars are a viable option if you’re working with a tighter budget, or if the thought of losing money that fast makes you a bit queasy. By buying a used car, you let someone else’s wallet take the depreciation hit. Car and Driver reports that when you choose a used car, you usually can sell the vehicle a few years later for a similar price if a different model catches your eye.

While you have to buy new cars from dealerships or the manufacturer, you have more freedom when choosing a used vehicle. You can shop on the used side of a dealership lot, a dedicated used dealership, or from an independent seller. This variety of sources can help you find the used models with the features you want.

Before you make a purchase, a used car should be checked by a mechanic. Peter Gareffa of Edmunds reports that you can go to a garage you trust, but most auto shops offer a used car inspection service. While you want to trust whoever you’re buying from, an inspection helps you know if the vehicle is really a good deal or a clunker you’ll have to fix up.

Certified pre-owned

Between a new car and a used car in price is a certified pre-owned vehicle. The original manufacturers run these programs, and they are often stocked with cars that were once rentals or part of a lease agreement. Regardless of their previous use, all certified pre-owned vehicles are inspected by mechanics to make sure they meet high standards. Most CPO cars also come with additional warranties to put you at ease. To learn more about CPO vehicles, choose your preferred automaker and look at their specific program details.

Replacing your car can be a stressful time, but with some research, you can roll away from the experience with the perfect ride for you.

Let IH Credit Union help you buy a new car. Check out our great rates!


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Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.
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