New vs Used Cars: 4 Questions to Help You Decide Which One to Buy?

Especially after the COVID-19 pandemic, new car dealers have flooded the market with lucrative deals. And these are enticing enough to convince many to buy a new vehicle. After all, new cars do not carry any history, have the fresh smell of being brand new inside, carry manufacturer-backed warranties, and provide the peace of mind of low repair costs. But these do not throw used cars out of contention. If bought from the right Greenville used car dealerships, most used vehicles also carry similar features for a far lower price. The decision between the two may seem difficult but the answer is fairly obvious.

To find the convincing option, you need to ask yourself the following 4 questions. In the end, you will know if the brand-new smell is worth it or should you go for financial smartness.

1. Do you have $40,000 to spend behind your car?

$40,472 to be exact – the average price of new cars as of 2021. In case you have that kind of money, you can certainly go for new cars. With the exciting add-ons, that price goes up further. In contrast, the average price of used cars is around $22,000-mark currently. And this figure goes down as you go older with the vehicle that you are buying. Affordability is naturally the first question you need to ask yourself. Are you willing to pay almost 50% extra for a new car or should you visit used car dealerships in Greenville, SC, instead?

2. Are you ready to take the depreciation hit?

An average American keeps ownership of his/her car for nearly 5 years. And a new car loses most of its dollar value during that phase. Just in its first year, a new car will lose 25% of its initial price and by the end of the second, the vehicle will be worth 33% less than what you paid. By the time you sell after 5 years, you will only get 50% of the purchase price in return. Depreciation flattens after the 5th year. So, if you buy a 5-year-old used car and sell it after 5 years, you might lose a maximum of 10-20% of the initial dollar value depending on the car.

3. Is warranty worth the extra price?

Many argue that the warranty deals of new cars are exceptional. Manufacturers now provide 5-year bumper-to-bumper and almost 10-year powertrain warranties on new cars. But is this deal worth almost $18,000 extra, going by the average prices of new and used cars? Certainly not. In Family Auto sales, you get a flat 2 years/36,000 miles warranty on any used car that you buy. Following that, even if you buy extended warranties to keep your car covered, the added expense will come to a maximum of $6,000 for a net warranty of 10 years. Naturally, warranties are no longer convincing reasons to buy new cars.

4. Are you buying a new car just to avoid repair costs?