Mmmmm, the new car smell. Can you smell it? The leather interior, power windows and power door locks, sunroof, navigation system, eco transmission, BlueTooth integration, iPod integration, DVD/CD player, satellite radio, seat warmers, sun roof, backup cameras, safety features galore, and even a plug for electronic devices in the third row of seating… I could go on. Yes, we are very blessed and I will never forget driving off the lot in our brand new Odyssey – my very own swagger wagon, or as hubby likes to call it, “soccer mom transportation”. We chose to buy new.
Wait though, before you jump to asking what is wrong with me and wonder what I was thinking, I did my research. Anybody can read the reviews online and see that most tell you that when choosing a new vehicle over a used vehicle you should buy used. They give all sorts of reasons that are very accurate and make complete sense. They’re usually right. The first thing you’ll read when looking into making this choice is to consider depreciation of your vehicle. On average, a vehicle loses 15% to 25% of its value each year for the first five years, according to Edmunds.com. Depreciation may not matter initially to you, but there is no denying it will have an impact when it comes time to trade in your vehicle. They will tell you exactly what my grandpa told me, vehicle insurance is lower because newer vehicles tend to cost more due to the newer parts and cost of repair if you had an accident. They’d point out that there are more taxes to pay on the higher value of your new vehicle purchase. Again, spot on. And in reality if my family and I had any intention of trading this vehicle in the near future we would have hunted down one a few years older and let someone else take a bit of a hit on the depreciation. But the fact of the matter is that buying new isn’t always a bad idea.
We are travelers and we’re military, so we spend many hours on the road. The gas mileage in our newer vehicle vs. a used vehicle alone was a very strong factor in our choice. We typically don’t function well without two vehicles. We didn’t want to run the risk of an older vehicle - who’s history we didn’t really know - breaking down, then spending many hours in the shop due to someone else’s neglect. The manufacturer’s warranty kept us from having to worry about much if we had any issues with the new vehicle – at least for a while.
We chose knowing we would need to own this vehicle for at least eight to ten years ourselves to ride out (pun intended) the higher insurance rate, depreciation, and initially higher taxes, rather than to worry about a previous owner who skipped oil changes or abused an older vehicle. We knew that we were this vehicle’s owner and that we were responsible for whatever regular maintenance and driving habits it encountered.
We are lucky to have a truck we purchased new in 2005 that we still drive and is completely paid, so having one vehicle payment was doable. Had we had to have two, it may have been a different story. We got an amazing deal with a way better finance rate over what we would have bought new. In addition, we received a decent cash rebate.
Here are a few other reasons that you may consider new:
- Government incentives - you can still find plenty of government incentives that cut the price of new electric vehicles, plug-in hybrids, and alternative-fuel vehicles.
- Don’t need all the extras? You can custom order a new vehicle from the dealer without all of the unnecessary options and get a competitive price for a brand new vehicle.
- Safety – visit http://www.iihs.org/iihs/ratings see how well certain vehicles protect their occupants in a crash
The reality is that you need to be educated and know what you need. Balance what you can afford, what you need vs. want, and take in the benefits of purchasing either a new or a used vehicle. It’s very easy to find an argument online in favor of buying used, but don’t be surprised if you occasionally find that a new vehicle presents the better value.
What things do you weigh when choosing new vs. used?
Have you ever purchased a new vehicle? Why?
Have you ever purchased a used vehicle? Why?