First Car - New or Used?

First Car - New or Used?

If you are saving for your first vehicle, you may wonder, "Should I plan to buy a new car or a used car?" Parents of soon-to-be drivers may be facing a similar dilema. So how can you think this matter through?

For most first-time buyers, a used car is a wise move but there are a few factors to consider when buying a new car makes more sense. Below are a few reasons to help you decide what to buy.

The reality 

New cars are expensive, with an average cost of around $49,000. New cars lose their value fast—approximately 20% in the first year alone. On the other hand, used cars are typically $20,000 or less. 

Why might a used car could be a better choice for your first vehicle?

A typical used car is less expensive in terms of the upfront cost and the monthly cost. 

Less debt = less stress

You may have lower insurance costs compared to a new car, and there is no need to worry about the first scratch. 

A good rule of thumb is to try to find a vehicle that is 3-5 years old. They are still modern looking and if they were taken care of by the first owner, the car should still be reliable.  

Why might buying a new car might make sense?

Get a new car if you can comfortably afford it (not stretching your budget). One nice perk with new cars is that they often come with a warranty that will cover certain types of maintenance and repairs for several years. Be sure to research this carefully, because there are different types of warranty coverage. It is good to know about warranties and related costs before you actually talk to a new car salesperson. They can be quite persuasive and the pressure to buy could cause you to make a poor decision.

Once in a while, car dealerships will offer low-interest financing or incentives for those purchasing new cars. Depending on the company, they might be willing to offer you complimentary services, for example, free oil changes or car washes, as long as you own the car.

For many, their preference in investing in a new car is to also get the latest safety technology, and perhaps better fuel efficiency. 

Smart first-car strategy

 * Buy used (3–5 years old)
 * Look for reliable brands (Toyota, Honda, KIA, etc.)
 * Once you find a vehicle, make sure to get a pre-purchase inspection
 * Keep your total car costs (payment, gas, insurance) reasonable

At NHSA, our goal is to provide online driver education courses that equip all drivers with what they need to be safe drivers.  Whether you are a teen seeking a learner’s permit, or an adult driver seeking a basic driver safety course, check us out online to see what courses are available in your state!