Credit: Edmunds
Buying your first car is an exciting milestone, but the big question many first-time buyers face is: should you buy new or used? Both options have advantages and disadvantages, and the right choice depends on your budget, needs, and priorities. This guide breaks down the key factors to help you decide.
The Case for Buying a New Car
A brand-new car may sound like the ultimate dream, but is it the best decision for a first-time buyer?
Pros of Buying New
- Reliability & Warranty – A new car comes with a full manufacturer’s warranty, meaning fewer maintenance headaches in the first few years.
- Latest Safety & Tech Features – Modern vehicles offer advanced safety features like automatic emergency braking, lane departure warnings, and infotainment systems that may not be available in older models.
- Lower Interest Rates on Financing – Banks and dealerships often offer lower interest rates on new car loans, making financing more affordable. If you’re a young driver exploring options, this guide on doing a financing a car for the first time can help you understand available deals and requirements.
- Customization – When buying new, you can choose your preferred color, trim level, and features.
Cons of Buying New
- Depreciation Hits Hard – A new car can lose 20-30% of its value in the first year alone and up to 50% after five years.
- Higher Upfront Cost – The starting price for a new vehicle is significantly higher than a used one.
- Higher Insurance Premiums – Since new cars are worth more, insurance companies charge higher premiums.
A new car might be the best option for buyers who can afford the premium price and want the peace of mind of owning a reliable, tech-packed vehicle.
The Case for Buying a Used Car
For many first-time car buyers, a used car is the more practical choice.
Pros of Buying Used
- Lower Purchase Price – Used cars are significantly cheaper, allowing buyers to afford a higher-end model or trim level than they would with a new car. Due to a wider market that isn’t limited by MSRP, you’re way more likely to find an awesome deal as well.
- Slower Depreciation – A car that’s a few years old has already absorbed most of its depreciation, meaning its value won’t drop as rapidly after purchase.
- Lower Insurance Costs – Insurance premiums tend to be lower for used cars, helping keep overall ownership costs down.
- More Affordable Financing – While interest rates on used car loans are often higher, the lower overall price still makes monthly payments more affordable if you’re not paying for it outright.
Cons of Buying Used
- Higher Maintenance & Repair Costs – Older cars may require more frequent repairs and maintenance.
- Limited or No Warranty – Unless buying a certified pre-owned (CPO) vehicle, used cars may not come with a manufacturer’s warranty.
- Unknown Vehicle History – Unless you buy from a reputable dealer or get a vehicle history report, there’s a risk of buying a car with hidden issues.
Therefore, a used vehicle is probably a more suitable option for budget-conscious buyers who don’t mind a car that’s a few years old and are comfortable handling potential maintenance costs.
Certified Pre-Owned (CPO): A Middle Ground?
If you’re torn between new and used, certified pre-owned (CPO) vehicles offer a compromise. These are lightly used vehicles that have undergone manufacturer-backed inspection and certification. These cars meet strict criteria, including age and mileage limits, and come with warranties and other benefits.
CPO Features:
- Manufacturer-backed warranty (extends beyond the original factory warranty)
- Multi-point inspection (typically 100+ checkpoints)
- Lower mileage and newer model years (often under 5 years old and fewer than 60,000–80,000 miles)
- Additional perks like roadside assistance, loaner cars, and special financing options
Who Certifies CPO Cars?
- Manufacturer CPO programs (Toyota, Honda, BMW, etc.)
- Dealer-backed CPO programs (not as reliable as manufacturer-backed)
While CPO cars cost more than regular used cars, they offer peace of mind without the high depreciation of a new car. If you’re looking for long-term reliability and lower risk, CPO is also a great choice, but if budget is your top priority, a carefully inspected used car can be a better value.
Great First Cars for New Drivers
Whether you’re buying new or used, some cars stand out for their reliability, affordability, and safety. Here are three great choices for first-time car buyers:
Toyota Corolla
- Affordable to buy and maintain
- Excellent fuel economy (~32-40 mpg)
- Known for long-term reliability
Honda Civic
- Fun to drive and fuel-efficient
- High resale value and strong safety ratings
- Wide availability of both new and used models
Mazda3
- Sporty handling with good fuel economy
- High-quality interior for the price
- Available with all-wheel drive (AWD) for extra stability
All three cars offer a balance of affordability, durability, and modern safety features, making them ideal for first-time owners.
The Verdict: Which One Should You Choose?
We’ve gone through a lot of options, but ultimately, your decision to purchase a new vs used car should be based on your budget, lifestyle, and long-term plans.
Reasons to Buy New:
- You want the latest features and safety tech.
- You plan to keep the car for 8-10 years (to justify depreciation).
- You qualify for low-interest financing and can afford higher insurance costs.
Get A Used Car If:
- You’re on a tight budget and want to avoid high monthly payments.
- You’re okay with minor wear and tear and occasional repairs.
- You prioritize overall affordability over having the latest features.
Consider A CPO Vehicle If:
- You want a warranty but don’t want to pay full price for a new car.
- You’re willing to spend slightly more than a regular used car for added reliability.
Final Thoughts
At the end of the day, both new and used cars have their advantages and trade-offs. If you have the budget and plan to keep your car for a long time, a new car might be the better investment. However, if you’re trying to save money and want to avoid major depreciation, a used or certified pre-owned car is likely the smarter choice.
No matter what you choose, make sure to research thoroughly, test drive your options, and get a vehicle history report if buying used. Happy car shopping!