Buying a Replacement Car: New or Used?

How satisfied are you with your present vehicle? Unless additional safety features, increased fuel economy, or other compelling reasons really justify the cost of a newer model — or you're sick of driving the same old workhorse year after year — repairing a good older vehicle and continuing to drive it is often a wiser move. If you decide to replace your old car, you face another decision: whether to buy a new vehicle or a used one. Each option offers advantages and disadvantages, so keep an open mind until you have all the facts.

The advantages of buying new
The allure of new cars is certainly compelling: shiny paint in myriad rainbow colors; gadgets and doodads that blink and glow; and who can resist that new car smell? But there are more — and better — reasons than these to consider a new car.

Safety features
The best reason for buying a new vehicle is to replace one that lacks such vital safety features as air bags, integrated child seats, structural reinforcements and the like.

Other technological improvements
In recent years, innovations in steering and suspension, fuel injection, and basic equipment have resulted in vehicles that get better gas mileage, run cleaner, and can go for long periods of time between tune-ups and other periodic maintenance.

You don't have to worry about past problems/neglect/repairs
It's nice to have a car that's all your own, free of the mistakes, mishaps, and poor choices of a previous owner. It should be pristine, rarin' to go, and free of the battle scars and aging components that can plague an older vehicle. Of course, some new cars have problems of their own due to faulty manufacturing or newfangled systems that may succumb to unforeseen circumstances. The choice of risks is yours. However, there's no denying that a new car is often considered more attractive and prestigious than an older model from the same manufacturer. You pay your money and you take your chances.

The advantages of buying used
Although owning a brand-new car is nice, there are many reasons to buy a good used vehicle rather than a new one.

Used vehicles cost less to own and maintain
Consumer Federation of America spokesperson and author Jack Gillis advises that "buying a used car will reduce your ownership and operating expenses by about 50 percent." Perhaps the best proof of this is that, currently, the average age of vehicles in the United States is nine years — the highest in half a century. And if that's not enough to sway you, consider the following tidbits of financial fodder:

Registration, licensing fees, and insurance premiums for new cars are much higher than for used cars.
When you buy a used car, you don't have destination, "dealer prep," and shipping costs to pay.
You can keep a well-made vehicle running beautifully for a lot less than you'd spend on new-car payments, fees, and premiums, even if you rebuild the engine or restore the body.
In addition to the fact that new cars can depreciate 30 percent to 40 percent in only two years, buying or leasing a new vehicle can continue to cost you several hundred dollars a month for an average of three years. As one Consumer Reports Buying Guide put it, "A new car depreciates 20 to 30 percent the minute you drive it off the dealer's lot." Why not buy a two- or three-year-old used vehicle and let some other hotshot take the loss?
A well-built automobile that has been properly maintained can stay on the road for over 150,000 miles, even though most of us think our cars are played out at half that mileage.
Used cars can be classics
While new cars devaluate, many older cars are gaining in value and prestige. Some of us view cars as works of art and dream about owning a really classic piece of automotive engineering. If you're in the market for a status symbol, it may be wiser (and more impressive) to forget about the new luxury models and look for an older classic car instead. The same holds true if you consider your car an investment and not just a machine to move you and your brood from here to there and back again.

Such oldies increase in value because they're beautifully made — in many cases, by hand. And, although their owners usually love and pamper classic vehicles, in the long run, rust and accidents cause the supply to diminish and the value of the surviving ones to increase.