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Should I Buy a New Car? 6 Reasons to Buy a New Car over a Used Car


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Despite big promotional events and appealing advertisements, new cars come with hefty price tags and lose their value very quickly due to depreciation. In fact, there are many benefits to buying a used car for cheap over a brand new one.

However, there are a few specific occasions when a new car isn’t just a luxury indulgence and a way to pamper yourself. It actually makes more sense to buy new in these cases.

In the six situations below, a new car might be the wise and worthwhile purchase for you.

Benefits of Buying a New Car

1. New Safety Technology

In the automobile industry, the amazing power of computer processors has sparked a technology revolution, and manufacturers are finally using technology to enhance safety. When you spend on a new car, you can find advanced safety features including:

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  • Stability control
  • Adaptive cruise control
  • Lane departure warning
  • Blind spot monitoring
  • Rear-view camera

As with earlier developments like anti-lock brakes, these new features are quickly trickling down from high-end luxury cars to family sedans and even economy brands. It’s too soon to find them in most used vehicles, but you can find affordable new cars with great safety features.

2. Fuel Efficiency Breakthroughs

Federal regulations have average fuel efficiency set to rocket from 27.5 MPG in 2010 to 39 MPG by 2016. While small fuel efficient cars have been on the market for a few years, the mileage ratings of other vehicles – usually the more budget-friendly cars – have languished until now. In the next few years you’ll see minivans, pickup trucks, luxury cars, and even sports cars posting efficiency numbers that were once only found in hybrids and small economy cars.

If you put a lot of mileage on your car, you can balance upfront cost of a new car with the long-term savings of a more efficient engine (especially with gas prices rising).

3. Alternative Energy Advances

Though the ethanol boom has faded, other alternative energy trends are here to stay. Pure electric vehicles like the new Nissan Leaf and the Ford Focus Electric promise to dramatically cut energy costs per mile driven. Their equivalent fuel economy ratings are in the triple digits, making a Toyota Prius look like a gas guzzler. Not to be outdone, GM is now selling the Chevrolet Volt, their plug-in hybrid that will run on either gas or electricity. A plug-in Prius and the Ford C-Max Energi should also hit the market next year.

Don’t forget that electric cars aren’t the only alternative-fuel vehicles. Diesel-engine cars, long popular in Europe, are making a big comeback in North America. They offer very high mileage, especially on the highway. Honda even sells a methane-powered version of the Civic, which is in high demand in parts of the country where natural gas is cheap.

You could save thousands of dollars in energy expenses in just a few years with one of these new vehicles. Electric cars won’t be available in the used car market until a few years from now, and they’re going to be in very high-demand, which means their prices will be higher than most used cars.

4. Cars for the Long Haul

mechanic examining suspension vehicle steel rod

Used cars make sense if you plan to keep a car for a few years and then sell or trade it in for another used car. But if you plan to keep up with maintenance and watch the odometer roll way past 100,000 miles, you may not want the uncertain history that comes with a used car. Rather than worry about a previous owner who skipped oil changes or abused an older car, with a new car you know that you’re responsible for gentle driving and regular maintenance. Owning a car for a decade or more will mitigate the initially high taxes and depreciation enough that they will average out to be close to the costs of a used car.

5. Government Incentives

Cash for Clunkers came and went, and traditional hybrids no longer earn green energy tax credits. But you can still find plenty of government incentives that cut the price of new electric vehicles, plug-in hybrids, and alternative-fuel vehicles. The natural gas–powered Honda Civic GX, for example, comes with a $4,000 tax credit. If you buy a plug-in hybrid or pure electric car, you’ll be entitled to a whopping $7,500 tax credit.

Remember, this is not just a tax deduction, it’s a tax credit: the equivalent of cash back. Learn more about the differences between a tax credit vs. a tax deduction.

6. Simpler Needs, Simpler Costs

You might be drawn to a new car by a low advertised price, only to learn from the car dealership that the base price is for a low- or no-frills model. To get the advanced features like cruise control, voice recognition, a navigation system, and seat warmers, you’ll deal with a list of expensive options, often adding as much as $10,000 to your total – before taxes.

If you know that you don’t want pricey options like “pearlescent” paint coating, larger wheels, or even an automatic transmission, you’ll probably find less of a difference between the prices of new cars and used cars. If you’re just trying to get to the office or train station and back, you can custom order a new car from the dealer without all of the unnecessary options and get a competitive price for a brand new car.

Final Word

Anyone who tells you that the new car vs. used car debate has an absolute winner hasn’t really considered every circumstance.

In most situations, a used car is the lower-cost, higher-value option. But with recent advances in technology and government incentives, new cars have enough significant benefits that they’re often worth the extra expense. It’s up to you as a smart consumer to weigh your needs against the costs and benefits of both new and used cars. Don’t be surprised if you occasionally find that the new car represents better value.

Was your most recent car purchase a new or used vehicle? How did you finally make the decision?


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Jason has been writing about personal finance, travel, and other topics on blogs across the Internet. When he is not writing, he has a career in information technology and is also a commercially rated pilot. Jason lives in Colorado with his wife and young daughter where he enjoys parenting, cycling, and other extreme sports.