Car Shopping? Should You Buy New Or Used?

It’s the choice that millions of car buyers make each year: Do you buy a brand-new ride or opt for a used car for sale in Bellville to save money? Deciding between that new car smell or a pre-owned vehicle comes down to more than just price — but it’s an important factor.

If you are trying to save money on your initial purchase, a used car from a dealer in Durbanville is a good choice. But you’ll need to consider the cost over the life of ownership — including maintenance and repairs. You may find that buying new is the better choice for your finances.

Compare costs: New vs. used cars

There are options for scouting out your purchase, whether new or used. You can find new cars at a local dealership or by searching on vehicle sites. Used cars are available through local dealerships in areas like Eikenbosch, where you can find them potentially cheaper.

In general, used cars are cheaper than new cars. But both have increased dramatically in price over the last few years. 

To best prepare for the cost of owning a vehicle — new or used — Kelley Blue Book and Edmunds can give you a sense of purchase costs and five-year maintenance costs.

Monthly payments are based on the average interest rates for new and used vehicles as of Q1 2022 and a 60-month term. Maintenance and repair costs for the first year of ownership are according to Edmunds.

Price shouldn’t be the only factor you consider when selecting a car. You should also weigh vehicle depreciation, safety features, reliability and your preferences.

Considerations when buying a new car

Pros of buying newCons of buying new 

A new car comes with a range of features — many of which you get to pick if you can find the right dealership.

• Customization: The primary benefit of buying a new vehicle is that you can get it outfitted to your preferences — you can select the colour and style you want and request any add-ons that appeal to you.
• Current technology: There are practical advantages too — you will drive off with the latest technology and safety features.  
• Better interest rates: With a new car purchase, you are also more likely to get a better interest rate on an auto loan than you would with a used car purchase, often by a few percentage points.  
• Reliability: You won’t have to contend with any potential hidden mechanical problems when you buy new. Plus, the vehicle’s warranty should limit your spending on repairs and maintenance in the first few years of ownership.

Unfortunately, buying new is more costly and comes with a few downsides that can dent your wallet.

• More expensive: New cars are often several thousand dollars more expensive than their used counterparts, which could make a down payment or monthly loan payments harder to afford. 
• Depreciation: You’ll also have to contend with vehicle depreciation or the rate at which your car loses value. As the saying goes, new cars lose value as soon as you drive them off the lot. Experian estimates that new cars lose 20 percent of their value in the first year, and depreciation continues for the first 10 years of ownership. 
• Higher insurance costs: New cars often cost more to insure because of their higher chance of theft, higher value and other related factors.

If you do decide that purchasing new is the right choice for you, plan and look out for seasonal deals. Timing your car purchase carefully and shopping around for auto loans can reduce some upfront expenses.

Considerations when buying used

Pros of buying usedCons of buying usedBudgetBells and whistlesMaintenance needs

With a used car, you could save money on the monthly payment, insurance and other fees. Plus, depreciation will likely happen at a slower rate. Take a closer look at these key benefits below:

• Less expensive: Used vehicles’ primary benefit is that they tend to be less expensive than their new counterparts. Getting the same model you want a few years old could save you a couple of thousand dollars. 
• Lower insurance costs and fees: Many pre-owned cars carry lower insurance rates, titling fees and sales taxes. You may save both on the lot and over the car’s life.
• Slower depreciation: Used cars also depreciate much more slowly. Rather than losing 20 percent of its value in the first year of ownership, a three-year-old car would likely only lose close to 10 percent.

Buying used may require you to adjust your list of wants for your next ride, research the car’s history and spend extra funds to maintain the vehicle.

• Making compromises: You will have to search to find the style, colour and add-ons you want. And even then, you may have to make some compromises. The car market is extremely competitive right now, and you may be unable to tick every box.
• Car history: You will also need to check the vehicle’s maintenance record to ensure that the previous owner took good care of it. It’s wise to bring the car to a trusted mechanic for a checkup — including a brake check and engine test — before closing any deal. 
• Increased maintenance costs: Even if the car is in relatively good condition, a used car will inevitably need more maintenance and repairs over time. This could eat into the savings you get from your initial purchase, so consider your long-term budgeting when selecting new versus used.

If you are trying to save money on your initial purchase, a used car is a good choice. But you’ll need to take into account the cost over the life of ownership — including maintenance and repairs.

Certified pre-owned options

If you’re leaning toward buying a used but are hesitant about trusting the vehicle’s history, a certified pre-owned vehicle is a great choice. A certified pre-owned car is a used car that has undergone a complete inspection by the dealership or manufacturer.

These cars are a middle ground between used and new vehicles in terms of upfront price since you’ll pay extra for the inspection. This additional certification is perfect for a driver who wants the security of a car in mint condition without the price tag of a brand-new vehicle.

How to choose whether to buy a new or used car

Deciding between a new or used vehicle will come down to factors including financial considerations and your tastes and needs. Consider these issues when choosing which type of purchase is right for you.

Multiple costs are often cheaper when you buy a used vehicle rather than a new one. Everything from the price of car insurance to dealer fees will be less expensive when you buy a used vehicle. Depending on the vehicle you choose, the purchase price will also typically be less for a used car.

When you crunch the numbers to determine how much car you can afford, look beyond the monthly payment and insurance. Be sure to include annual registration fees, fuel costs, maintenance and repairs.

One of the benefits of buying a new car is that it will include the latest technology and safety features. What’s more, if being able to select a specific vehicle colour or interior finish is important to you, a new car purchase will make this easier. When purchasing a used car, you may have to spend a long time searching to get exactly what you want.

Still, the luxury of choosing the best tire package, sound system or seating may not outweigh the cost-savings of skipping these add-ons and buying used ones. 

A slightly older may have higher maintenance costs, which is an important consideration if you have a limited household budget. Much of the maintenance associated with a new car will likely be under warranty.

But if you’re leaning toward a used car that’s no longer under warranty, this isn’t necessarily a deal breaker. You can purchase an extended warranty to get the added protection you need. 

How to find the best deal on your car

Whether you decide to buy a new or used one, remember that researching the vehicle is the most crucial element in getting a great deal. Your research should include checking the model’s safety record, insurance costs and five-year cost-to-own. 

You should also take the time to test-drive multiple vehicles and shop around with a few sellers, getting quotes from several auto loan lenders. Ensure that you get the lowest monthly payment and most competitive financing terms to keep more of your hard-earned money in your pocket.

The bottom line

Deciding between new and used comes down to several factors, including your concerns around depreciation, budget, your determination to have certain features and how long you plan on having your car.

Once you have a car in mind, shop around and get preapproved on financing before you head to the dealership for the best deal.

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