Better To Buy New Or Used Car
Less maintenance. New cars are less likely to need as much maintenance as used cars do. Dealers often offer a free two-year maintenance package, too, so your oil changes and such are covered for that time.
better to buy new or used car
Less warranty. Even though used cars may have some of their original factory warranty remaining, you would likely need to purchase an extended warranty to get the same coverage as a new car.
"Shrunken inventory continues to wreak havoc on both the new and used vehicle markets," said Jessica Caldwell, Edmunds' executive director of insights "Shoppers who can actually get their hands on a vehicle are committing to never-before-seen average payments and loan terms."
If you're shopping for a new or used car in today's difficult marketplace, please see "Car Buying Tips for 2022" for our experts' targeted, data-driven advice. Note that the article below was originally written before the chip shortage when vehicle prices were relatively stable and predictable. If the shortages continue, there may be a so-called "best time to buy" for the foreseeable future. The best time in the current market is when you find a dealer that has the vehicle you want and is willing to sell it to you at MSRP or better, without any additional options that you may not need.
End of month
End of the calendar year
Best month to buy a car
Best day to buy a car
End of the model year
End of the car's design cycle
End of the car's life cycle
Best time to buy a used car
When the month is coming to an end, dealers might be a few cars short of a sales quota that would win them a big bonus. Salespeople will have more motivation to make a deal with a buyer and might deeply discount cars, making up any money lost with the bonus. This is the time when you shouldn't sleep on the car deal. Keep in mind, however, that if the sales team met its quota earlier that month, salespeople may not be as motivated to give you the screaming deal you might be expecting. This is difficult to know ahead of time. But if you're in the midst of negotiating and the dealer offers you a super-low price, take a moment to ask your salesperson why the dealer is willing to potentially lose money on this sale. If the reason makes sense to you, and the price is considerably better than your research says it should be, it could be a sign the dealer is trying to make a sales goal.
Each manufacturer handles the end-of-the-year selldown differently. So some car dealerships will have a better selection of outgoing-year vehicles late in the year, while the pickings could be slim at others. Be sure to check Edmunds' Incentives and Rebates for customer cash rebates, low-interest incentives and lease specials.
The months of January through April are generally slow-selling ones and have the smallest discounts off MSRP. In fact, the month with the smallest amount off MSRP is February, with an average discount of about 5.7%. Things get better in the summer months: The introduction of new cars drives down prices on outgoing models. And finally, the discounts improve the most the closer you get to the end of the year.
All the new model-year cars used to debut in the fall, making the end of summer a good time to shop for leftovers. These days, however, there is no unified new model-year season. For example, we see cars from the upcoming model year debuting as early as March of a calendar year. Even so, Edmunds data indicates that the end of the summer is a sweet spot for outgoing model-year vehicles.
Something to note: It's worth looking at the incoming model-year cars to see what features have changed and to get a feel for pricing. It's rare, but there have been instances when a car from the incoming model year has had better incentives than a car from the outgoing model year, particularly if you're looking to lease.
It's hard to miss the inflatable eagles, gorillas and wacky waving tube men that dot car lots, to say nothing of ads that promise "rock-bottom" prices. Does a "Star-Spangled Sale-a-Bration" mean savings for you? It can, but be prepared for a busier-than-normal showroom. Ideally, you want to do your research and test-drive before the holiday and close the deal on the weekend. Or, better yet, sew up the deal on the first weekday after the weekend. Here's a deeper dive into shopping on a holiday weekend. And the following is a list of the three-day holiday weekends, along with a brief rating of each:
New car models used to debut in the fall. But these days, there is no single time of year. Vehicles for the next model year can debut as early as the spring of the current year. And some cars don't debut until the spring or summer of their model year. In other words, you'll see some 2022 vehicles for sale as early as the spring of 2021. Some 2022 models, meanwhile, won't show up in dealerships until halfway through 2021.
Figure out the market value of the car using Edmunds tools, and factor in any incentives and rebates. Take a look at our new car pricing or used cars for sale where we rate a number of the vehicle prices to assist with negotiation and provide perspective on whether you have a fair offer. Watch for unexpected add-ons. Then make your deal. In the long run, this approach makes more sense than trying to predict the effects of weather, holidays, and the seasonality of your car purchase.
The choice between a new or used vehicle (and how you pay for it) could be the difference between riding the highway to wealth and financial independence or spinning your wheels in a rut of debt and endless payments.
And what would happen if he splits that average monthly car payment evenly between saving for his next car and retirement investing? Jack could keep buying slightly used cars for $12,000 every four years and still have $1.5 million saved for retirement by the time he hits age 65.
The biggest draw of a used car is the significantly lower outright cost compared to a new one. This is particularly the case if you go for older models which have already depreciated a significant amount.
Another benefit of financing a used vs. new car with bad credit is that your monthly payment will also be lower. This makes the loan payments more manageable for you as you work to build up your credit score.
And when it comes to picking a car, you will be better off choosing the base trim level of your chosen model, since it will cost less. If you do get approved for a new car loan with bad credit, your interest rate will be high. Here are some example credit scores and associated rates that Edmunds put together:
So Reed says having that preapproval can be a valuable card to have in your hand in the car-buying game. It can help you negotiate a better rate. "The preapproval will act as a bargaining chip," he says. "If you're preapproved at 4.5%, the dealer says, 'Hey, you know, I can get you 3.5. Would you be interested?' And it's a good idea to take it, but make sure all of the terms, meaning the down payment and the length of the loan, remain the same."
"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."
Even if you buy a slightly newer used car than the Raekers', the couple raises a great point. What else could you be spending that car payment money on? And if you can cut in half what you might otherwise spend, that's a lot of extra money for your retirement account, your kids' college fund or whatever else you'd rather be doing with that money.
More than half of all used car sales are made by car dealers. The best used cars are often those found within manufacturers' approved used schemes. You'll pay more for them, but the customer experience isn't that far removed from buying new.
Private purchases will give you better prices, while buying at auction will generally be the cheapest route to buying a used vehicle, but genuine bargains are rare and buyers have little comeback with sellers.
The biggest downside of buying used is uncertainty about a car's history. 'Clocking', or tampering with the recorded mileage, is still an issue. Ideally, a car will have a complete service history: if not, you can buy some reassurance in the form of a history check.
That depends on the make and model of the car, along with other factors such as mileage. If you can swing it, however, try to find a car that's at least two years old. Cars depreciate by a third of what they cost new after just 18 months. Buying cars that are around five years old can be an affordable option, because they are typically still in good condition, have already taken a big hit in their depreciation, and should have well under 100,000 miles on them."}},"@type": "Question","name": "How many miles should a used car have?","acceptedAnswer": "@type": "Answer","text": "A used car should have around 12,000 miles per year on it, and no more than 15,000 miles per year.","@type": "Question","name": "How long does a warranty last on a new car?","acceptedAnswer": "@type": "Answer","text": "The average new car has a three-year or 36,000 mile warranty. A powertrain warranty is usually five years or 60,000 miles."]}]}] .cls-1fill:#999.cls-6fill:#6d6e71 Skip to contentThe BalanceSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.BudgetingBudgeting Budgeting Calculator Financial Planning Managing Your Debt Best Budgeting Apps View All InvestingInvesting Find an Advisor Stocks Retirement Planning Cryptocurrency Best Online Stock Brokers Best Investment Apps View All MortgagesMortgages Homeowner Guide First-Time Homebuyers Home Financing Managing Your Loan Mortgage Refinancing Using Your Home Equity Today's Mortgage Rates View All EconomicsEconomics US Economy Economic Terms Unemployment Fiscal Policy Monetary Policy View All BankingBanking Banking Basics Compound Interest Calculator Best Savings Account Interest Rates Best CD Rates Best Banks for Checking Accounts Best Personal Loans Best Auto Loan Rates View All Small BusinessSmall Business Entrepreneurship Business Banking Business Financing Business Taxes Business Tools Becoming an Owner Operations & Success View All Career PlanningCareer Planning Finding a Job Getting a Raise Work Benefits Top Jobs Cover Letters Resumes View All MoreMore Credit Cards Insurance Taxes Credit Reports & Scores Loans Personal Stories About UsAbout Us The Balance Financial Review Board Diversity & Inclusion Pledge View All Follow Us
Budgeting Budgeting Calculator Financial Planning Managing Your Debt Best Budgeting Apps Investing Find an Advisor Stocks Retirement Planning Cryptocurrency Best Online Stock Brokers Best Investment Apps Mortgages Homeowner Guide First-Time Homebuyers Home Financing Managing Your Loan Mortgage Refinancing Using Your Home Equity Today's Mortgage Rates Economics US Economy Economic Terms Unemployment Fiscal Policy Monetary Policy Banking Banking Basics Compound Interest Calculator Best Savings Account Interest Rates Best CD Rates Best Banks for Checking Accounts Best Personal Loans Best Auto Loan Rates Small Business Entrepreneurship Business Banking Business Financing Business Taxes Business Tools Becoming an Owner Operations & Success Career Planning Finding a Job Getting a Raise Work Benefits Top Jobs Cover Letters Resumes More Credit Cards Insurance Taxes Credit Reports & Scores Loans Financial Terms Dictionary About Us The Balance Financial Review Board Diversity & Inclusion Pledge BudgetingBuying a New Car vs. Buying a Used Car: Which Should You Choose?Price and warranty coverage will be factors to consider 041b061a72