New car or used car: How to choose

It’s hard to resist the lure of that new car smell. And, for many, a new vehicle is the ultimate status symbol. But if you’re on a budget, purchasing a used car can still provide the thrill of buying the ultimate big-ticket item — with a much smaller price tag.

Compare the two options



Lose 20-30% of value in first year Already depreciated in value--you pay less
Covered under warranty Certified used vehicles offer warranty
Attractive rates on dealer financing Competitive financing available
Insurance coverage usually more expensive Usually lower insurance costs
Wide selection of customized options Expensive options already installed
No concern about vehicle history Reputable dealers mitigate risks

What to look for
Before you start car shopping, make a list of all the key vehicle features you are looking for. This will help you to separate what you need from what you merely want. Consider such things as:

  • Does it have the cargo space you need?
  • Are the driver controls comfortable to use and easy to find?
  • Does it have the passenger space you need today ­­— and may need for your growing family three years from now?

Take a test drive
Regardless of whether you buy a new or used car, taking a test drive is essential. Try to simulate as closely as possible your day-to-day driving patterns and make sure the vehicle handles well.

  • If you do a lot of highway driving, take the vehicle onto the highway.
  • If you’re a city driver, check out how easy it is to squeeze into tight parking spaces.
  • If you live in a hilly area, test if the vehicle has the climbing power you need.
  • If you often have a car full of backseat passengers, bring them with you, and get in the back yourself to see how comfortable it feels.

Being practical doesn’t mean you can’t go for a few bells and whistles. But make sure you buy a vehicle that is going to meet your needs and fit in with the reality of your daily life. 


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