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Should I Buy a New or Used Car?

Used car for sale sign on car window Used car for sale sign on car window

Before you decide whether to buy a new or used car, it's important to consider the reasons you're making the purchase.

If you're simply looking for an economical mode of transportation, a used car may be an option. Price isn't everyone's top priority, however. Many buyers are willing to pay extra for a car that's free of mechanical problems. Others like the idea of being a vehicle's first owner.

Here's a checklist of seven things to consider before you buy your next car.

1. Is Having the Latest Car Technology Important to You?

Car manufacturers have embraced new technology to improve the driving experience and improve passenger safety. The newer the car, the more high-tech features it's likely to have. Are you looking for a Bluetooth stereo system that connects to your smartphone? How about a rear-view camera that makes it easier to back up? Do you want an automatic braking system that deploys when a collision is imminent? If so, you should think about buying a new car.

2. How Much Are You Willing to Spend on Car Insurance?

New cars are more costly to repair or replace than used cars. In general, the more you pay for a car, the more it costs to insure. If saving money on insurance is important to you, a used car may work out best. The Insurance Information Institute says agents can estimate how much your insurance will cost before you make your purchase.1

3. Do You Want a Car That Enhances Your Image?

Many people view new cars as status symbols.2 Any car can take you from Point A to Point B, but a new car has more cachet. There's nothing like the gleam of a factory-fresh paint job to turn heads. If impressing friends or business associates is a priority, a new car may be right for you.

4. Are You Prepared to Deal with Maintenance Issues?

While used cars cost less than new ones, they typically require more maintenance. The older the car, the more often you're likely to visit the repair shop. According to Autotrader.com,3 you can minimize the chances of buying a used car with serious maintenance problems if you first have it inspected by a mechanic and obtain a vehicle history report from companies like Carfax or AutoCheck. No matter how well a car has been maintained, nothing lasts forever. If you dislike upkeep, you may dislike owning a used car.

5. Are You Aware of New Car Depreciation?

A new car begins depreciating in value the moment you drive it away from a dealership. New vehicles typically depreciate between 15 and 25 percent each year over the first five years of ownership.4 It's not unusual for motorists to owe more on their new cars than they could recover if they resold them. If you're not prepared to absorb this loss in valuation, you should consider buying a used vehicle.

6. Will a Teenager Be Driving the Car?

The modern safety technology that new cars offer seems made to order for inexperienced teenage drivers. The problem is that new cars are very expensive to insure for teens. That's because inexperienced drivers are more likely than others to have collisions. If you're buying a car for a teen, your challenge is to find a car that strikes a good balance between car safety and affordability. For guidance, the National Highway Traffic Safety Administration provides detailed safety ratings for vehicles manufactured since 2011.

7. How Much Time Are You Willing to Spend Shopping?

The process of buying a new car is fairly simple. You go to a dealership and pick the model you want. The car you choose should be in sound mechanical condition. According to Edmunds.com, new cars come with a limited warranty of at least three years and a power train warranty of at least five years.5 That means you won't need to consult a mechanic before making your purchase. In contrast, finding a used car takes more time. You may visit numerous car lots before you find one that meets your standards. If you lack the time, a new car may work out best.

Sources:
1 http://www.iii.org/press-release/buying-a-new-car-or-truck-consider-auto-insurance-costs-and-protect-your-loan-when-trading-up-091713
2 http://www.msn.com/en-us/autos/research/top-14-status-symbol-cars-at-bargain-prices/ss-AA6AJry
3 http://www.autotrader.com/car-shopping/4-questions-to-help-you-decide-on-a-new-or-used-car-167808
4 https://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html
5 https://www.edmunds.com/car-buying/should-i-buy-a-new-car-or-a-used-luxury-car.html

Learn More About Car Insurance

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Bodily injury and property damage liability coverage can cover injuries to others, damage to others’ property, and your legal expenses if you cause an accident.


Umbrella Insurance [Video]

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*Quotes may not be available in all states or for all products. In CA, quotes for all products must be obtained through a local independent agent.

The information on this site is general in nature. Any description of coverage is necessarily simplified. Whether a particular loss is covered depends on the specific facts and the provisions, exclusions and limits of the actual policy. Nothing on this site alters the terms or conditions of any of our policies. You should read the policy for a complete description of coverage. Coverage options, limits, discounts, deductibles and other features are subject to individuals meeting our underwriting criteria and state availability. Not all features available in all states. Discounts may not apply to all coverages and/or vehicles.

Insurance is underwritten by The Travelers Indemnity Company and its property casualty affiliates, One Tower Square, Hartford, CT 06183. In TX: Automobile insurance is offered by Travelers Texas MGA, Inc. and underwritten by Consumers County Mutual Insurance Company (CCM). CCM is not a Travelers Company. In CA: Automobile Insurance is underwritten by Travelers Commercial Insurance Company, Certificate of Authority # 6519; Travelers Property Casualty Insurance Company, Certificate of Authority # 6521. Homeowners Insurance is underwritten by The Standard Fire Insurance Company, Certificate of Authority # 3545. Boat and Yacht Insurance is underwritten by The Standard Fire Insurance Company, Certificate of Authority # 3545. All underwriting companies listed above are domiciled in the state of Connecticut and are located at One Tower Square, Hartford, CT 06183. In WA: Automobile Insurance is underwritten by The Standard Fire Insurance Company. Homeowners Insurance is underwritten by Travelers Personal Insurance Company. Personal Article Floater Insurance is underwritten by The Phoenix Insurance Company and The Travelers Indemnity Company of America. Personal Liability Umbrella Insurance is underwritten by The Standard Fire Insurance Company, The Automobile Insurance Company of Hartford, Connecticut, The Travelers Indemnity Company of America, The Travelers Home and Marine Insurance Company, Travelers Commercial Insurance Company and Travelers Personal Insurance Company. Special Event Insurance is underwritten by The Standard Fire Insurance Company. Boat Insurance is underwritten by The Travelers Home and Marine Insurance Company. Yacht Insurance is underwritten by The Standard Fire Insurance Company, The Automobile Insurance Company of Hartford, Connecticut, and The Travelers Indemnity Company of America. Underwriting companies in CA and WA listed above are located at One Tower Square, Hartford, CT 06183.

Pet Insurance, Motorcycle Insurance, and Travel Insurance is not underwritten by Travelers or its Affiliates (“Travelers”). Travelers utilizes its affiliate, InsuraMatch, LLC, an independent insurance agency, to refer consumers interested in pet coverage, motorcycle and off-road vehicle coverage, and travel coverage. For more information about the underwriting entities click “Learn More” to be directed to the specific product page.