Is it better to buy a new car — or a used car?

This question of new-vs-used may get you a quick answer from many people — always buy used.

But not so fast. There’s more than one answer. And it depends on your personal preferences and finances.  With a record 18 millions brand new vehicles projected to be sold this year, it’s obvious that some people thing buying new is the answer.

Those people who always buy used cars typically have a limited budget, or are simply very frugal, and want to take advantage of the relatively low cost of such vehicles, when compared to brand new. This comes at the risk of buying a vehicle with problems or title issues but a smart buyer will know how to avoid or at least minimize any such problems.

Those people who buy brand new cars typically, but not always, can afford such cars and don’t mind paying the extra cost for the benefits that a new car offers. These buyers also tend to trade cars frequently so as to have the latest models with the most up-to-date styling and features. Many of these people lease their new cars — about 27% of all new vehicles are leased, not purchased.

Let’s look at some of the obvious pros and cons of buying used cars versus new cars:

What are the pros of buying a used car?

• You have a huge choice of makes, models, styles, ages, mileages, conditions — and prices
• You avoid high first-year value loss
• You can research vehicle history reports and reliability reports to help determine future reliability
• You can get a professional mechanic’s inspection to help avoid buying problem cars
• If you buy almost-new, you may get same styling and technology as new car, at a lower price, possibly with some remaining manufacturer’s warranty
• You pay lower sales tax, personal property tax, and insurance than for a brand new car of the same make/model

What are the cons of buying a used car?

• You buy “as-is” unless the seller/dealer provides a written guarantee, warranty, or return policy
• You might have to spend considerable time looking, test driving, and inspecting before finding the right car
• Lemon laws don’t apply to used cars, although some states have “implied warranty” laws that provide some protection
• You may be buying someone else’s problem, unless you have your vehicle inspected
• You risk buying a salvage vehicle in states that don’t have salvage titles
• Scams are common, particularly with cars listed on online sites such as Craigslist
• Used-car loans have higher interest rates than new-car loans
• You may get fewer new technology and safety features

What are the pros of buying (or leasing) a brand new car?

• You get the latest styles, safety features, and new technology
• You get a full manufacturer’s warranty
• New-car Lemon Law protection applies
• You get lower loan interest rates for new cars than for used cars
• You may get special incentives, rebates, low-interest loans, 0% loans, and special lease deals
• You can lease a brand new car, but not a used car
• And there’s always that incredible new-car smell

What are the cons of buying (or leasing) a brand new car?

• Value of a new car depreciates rapidly in the first couple of years
• Insurance rates will be higher than for a used vehicle of the same make, model
• Taxes will be higher based on higher value for new cars
• Leasing offers lower payments but might not be a good alternative to buying either new or used
• Regular maintenance may be required to meet requirements of manufacturer’s warranty

Summary

If cost is not a large factor, and you want worry-free driving with full warranties and all the latest tech and safety features, and latest styles, then buying or leasing may be the right answer for you. 18 million Americans a year can’t be all wrong. Besides, where would all the used cars come from in the future if someone wasn’t buying new cars now?

However, if getting the most value for your money, or you are on a limited budget and want a lower overall ownership cost, and don’t mind the extra time it takes to find the right car, in the right condition, then buying a used car might be the right answer. Although no numbers are available, there are several times more used cars sold in the U.S. every year than new cars.

Get quick used-car financing online at services such as InstantCarLoan.com that specialize in loans for people with credit issues.

In short, the right answer to the new-or-used car question depends on the buyer — their budget, their philosophy about money, their need for basic transportation versus style or features.