New Car vs. Certified Pre-Owned

You’re in the market for a new car, so do you get a new car or do you look at some used options? Of course, with a new car, you get the satisfaction of knowing that you are the only person who has ever driven it, and you have a wide range of options with all the latest features. With a used car, you get the reassurance that years of use have shown that it’s a reliable vehicle with no problems, and you have even greater options for buying.

With a used car, you aren’t limited to what’s available now – you can shop for any car that has ever been made (though some will be harder to find, admittedly). Certified pre-owned cars give you extra assurance since they have been thoroughly inspected and certified as dependable and quality vehicles.

So how do you know whether a new car or a certified pre-owned car is right for you? Here are a few things you should consider when making your decision:

The Price Difference

A new car is always going to be more expensive than the same model used. So if you’re just looking to save as much as possible, buying a used car is always going to be a better option. But you need to evaluate what goes into that price. A new car might be more expensive, but it might be a better value if the used car you’re looking at has a lot of miles, body damage, or other problems.

You need to consider the age of the car, the miles it has, and its overall condition. You also need to consider the extras that are included with the car, like options packages, add-on accessories, or trial subscriptions. All of these will add to the value of the car, and value is a much greater indicator for whether you should buy a car than price.

Depreciation

Have you ever heard that a new car loses its value as soon as you drive it off the lot? It’s true. If you were to try to sell your new car even a week after you bought it, you would not get as much for it as you paid for it. There is an immediate reduction in price thanks to the perception that the car is used and somehow less valuable. But the car could be in pristine condition and have only the mileage that it took for you to drive home.

Because of depreciation, certified pre-owned cars can be a better value than new cars. They can be purchased for a lower price than what their quality and features might otherwise fetch if they were newer. You can get a car that is nearly new, but because it has been previously owned, you will always pay less for it.

New Car Incentives and Financing

When you buy a new car, you are likely to be offered a number of incentives from the dealership. You might get a rebate, a discount off the purchase price, or a freebie like a Visa gift card or a TV. You might even be offered a special accessories package or a free subscription for satellite radio or something similar.

You aren’t likely to get these incentives when you buy a certified pre-owned car. Sometimes, you can get special pricing if the dealership is motivated to move inventory. However, the price will be pretty stable otherwise. You may be able to find pre-owned vehicles that were purchased with extras like options packages, but you won’t have the opportunity to add these yourself at purchase.

Whether you are buying new or certified previously owned, you should have access to great financing offers. Many dealerships sell both types of cars, and they offer the same financing to their customers based on their credit score and other financial circumstances. If you are buying a much older car, you may not be able to finance it for as long a term as you would a new car. However, you should be able to get the same great rates. Making a down payment can get you even better terms.

Warranty

Both new and certified previously owned vehicles often come with warranties. New cars are almost guaranteed to come with a warranty, typically provided by the manufacturer. The warranty usually covers the drive train for a limited number of miles. It is an assurance that the car will provide reliable performance for the first years of its life, and if it doesn’t, you can get the repairs needed without paying out of pocket.

Many manufacturer’s warranties continue to cover certified previously owned vehicles. The warranty often covers the car for five or six years or more, and many used vehicles are sold within that time frame. But even if the manufacturer’s warranty has expired, many certified pre-owned vehicles are covered by warranty protection from the dealership. The warranty is much more limited in scope, but it still offers some protection should you have any issues with the vehicle. The certification process is a type of guarantee, as well, since it inspects the car inside and out and top to bottom to make sure that everything is working properly.

Which Is Right for You?

Ultimately, the only right choice for you is the one you make. You might decide that having a new car is more important to you because you want to have total control over its history and you like the idea of being the only owner. Or you might decide that the cost savings provided by a certified previously owned vehicle are more important than status.

There are benefits to buying new and previously owned, so there is no one right answer for every person.