When buying a vehicle, one of the most common questions that you’ll ask yourself is: should I buy a new or used vehicle? Most people will instantly go to used cars if they’re living on a frugal budget, but others that can afford it or choose to pay with a financing deal will typically go for a new vehicle. But the one big dealbreaker that is all on our minds is: what is more cost effective? Let’s dive into five different cost points and see what comes out cheaper in the long run.
Buying a new car is often seen as expensive because of the initial cost. However, that’s usually not the main issue. In fact, the most pressing expense when buying a car is the maintenance and repair fees. You could end up paying the cost of a vehicle over a span of a decade in just parking fees, repair costs, insurance and fuel. However, the initial cost of a car is still important, and there’s a clear winner when it comes to it. Used cars will always be cheaper than their newer counterparts, making it the obvious choice when the initial investment is concerned.
Buying used or new typically doesn’t matter when it comes to fuel economy because it relies more on the make and model of the vehicle. However, old vehicles that have been used will still degrade overtime and, as a result, fuel economy is reduced the more well-used a vehicle is. This is because moving parts will ultimately contribute to wear and tear.
Maintaining vehicles means running inspections, tuning the engine and ensuring everything is running smoothly. Sadly, used cars typically have higher maintenance costs because the warranty period may have expired, meaning you’ll need to pay for repairs yourself. In addition, older cars might be tricky to maintain if they weren’t in a good condition when you bought them, resulting in higher costs.
Much like maintenance costs, repair fees are typically higher on a used car because parts might be harder to source, components might be more damaged resulting in the need for a complete replacement rather an just a clean-up. Most auto repair shops only stock parts for newer models, meaning that older cars will take longer to repair and also cost more money.
Insurance cost solely depends on the make and model of a car, so this can vary greatly depending on the used or new car you plan on buying. As a rule of thumb, most used cars are cheaper in car insurance because they aren’t as desirable, but again, this really depends on the make or model of your vehicle. In short, when trying to compare insurance costs, the used car will be slightly more expensive if both vehicles are exactly the same. However, the difference is minimal and it ultimately relies on other factors such as desirability, safety features and security, meaning this point comes to a tie.
If you can stomach the higher initial cost of a vehicle, then a used car will offer cheaper maintenance, repairs and even insurance costs. Unfortunately, if the payment is too high, then a used vehicle will serve you just fine.