The Ancient Debate: To Buy New . . . Or Used?

There are plenty of good reasons to buy a new car. . . and just as many good reasons to buy a used one.

Also, there are some not-so-great things about buying a new car – and exactly the same goes for buying used.

In between somewhere lies the balance.

If you decide on new, you won’t have to worry about the car. A new car is new; it has zero miles – no wear and tear. And it is completely warranted. If anything turns out to be wrong with it, you won’t have to pay for it.

One new car is also exactly like every other make/model new car of its type and trim/color. Identical in every way. This includes the one on Dealer X’s lot and the one on Dealer Y’s lot. Whether you buy here or there, you will end up with the same car.

This leaves you free to worry about the price of the car.

With used cars, it is the opposite.

Each one is a unique individual – with a unique history. One will have more – or less – miles on the odometer. Another will have more – or e less – wear and tear. One will have been garaged all its life and taken exceptionally good care of by its previous owner. Another will have been parked outside and neglected. After it’s been detailed by a dealership, it will be very hard to tell the latter car from the former.

This makes buying a used car inherently more risky. There are things you can do to reduce the risk, but that risk is always there.

There is also pressure on you, the buyer, to snap up the one you found that speaks to you, is the color you like, hasn’t got too many miles on the clock, seems to have been well-cared for – and so on.

Because it may be the only one just like it that you can find.

You can order a new car exactly the way you want it – color, trim, equipment. You may have to wait for it – and you may pay more for it (dealers tend to be less haggle-friendly on cars that are special-ordered because they want to sell you a car in their inventory, on the lot right now) but you will end up with everything you wanted and nothing you didn’t.

This may not have an exact dollar value you can pin on it, but that doesn’t mean it’s not worth a lot if compromise is not your thing.

Conversely, with a used car, you generally will have to . . . compromise. You can’t special order one the way you want it to be fitted out. You will probably have to accept one with most of the features you want but some you might not.

Or, a color that’s not your favorite – but the mileage is really low.

Probably the single most objective point-of-departure between a new used car, however, is that the used car is . . . used. No matter how well-cared-for, it will have some wear and tear.

The obvious things are brakes, tires and (if it has a manual transmission) the clutch. But you will also want to take into account major scheduled service items such as timing belt replacement, which many new cars with overhead cam engines have to have done every 75,000 miles or so. This isn’t something you can ignore without consequences. If you skip or delay the getting it done and the belt breaks, the engine will stop and you will be stuck.

As this is a major repair, you don’t want it to become necessary when you’re not ready. Like when you’re on a road trip and the belt fails in an unfamiliar town and now you’re stuck and at the mercy of whatever shop is nearby.

If the car you’re looking at is going to need a timing belt replacement soon (check the owner’s manual; scheduled service intervals according to mileage will be listed in the appendix) or any other major repair, find out what it will cost and try to haggle down the price of the car accordingly.

Still, you are rolling the dice with a used car.

Even if the car was owned from new by someone you know and trust, who took excellent care of it.

Because wear and tear.

With a used car, things are more likely to go wrong simply by dint of the fact that the car has been used. Ipso facto, it has less life left than a brand-new car. It is a machine and machines wear out, no matter how well they’re treated. This is even more true today because cars are also laden with electronics and suffused with software.

Watch out for:

• Turbocharged engines – These used to be found almost exclusively in sports cars but have become commonplace in family cars as the car companies try to squeeze more mileage out of cars while maintaining power/performance buyers expect. Turbos provide the on-demand power/performance of a larger engine with the fuel efficiency of a smaller engine – but the downside is more Stuff to potentially break or need repair as the car ages and the miles go by. While a larger engine without a turbo (such as a V6) might use a bit more gas than a turbocharged four, the V6 might cost you less to own over time, due to lower repair/maintenance costs.
• Direct injection – This is a very high-pressure form of fuel injection that almost all cars made after about the 2016 model year now have. It boosts fuel efficiency by about 3-5 percent, but the downside is the complexity of the system as well as potential down-the-road maintenance issues – specifically, carbon build-up on the engine’s internals. Cleaning that off can require partial disassembly of the engine, a not-cheap job. The car companies are attempting to deal with this by adding an additional port-fuel injection circuit (the fuel spray keeps the internals from crudding up) but this means you’ve now got two fuel systems to potentially worry about, post warranty.
• Auto-leveling suspensions – Many higher end cars have suspensions that can raise or lower the car’s ride height; often via pneumatic springs at each of the car’s four corners. Be very careful if you are looking at a used luxury car that has such a system as the repair costs can be brutal.
• Certain automatic transmissions – Some late-model cars have automated manual (also called “dual clutch” or “direct shift”) transmissions that operate like traditional (hydraulic) automatics, but are hugely complex pieces of technology and when they fail, the cost to replace (not repair; they are throwaways) can run to as much as $5,000 or more, parts and labor. I won’t mention any names (VW DSG transmission . . . whoops!) but do your research before you buy a used, especially high-miles car equipped with one of these.
• LED lights – You’d think a bulb would be no big deal. Think again. Sometimes, those little bulbs cost big bucks. If you are looking at a used car that has a few burned out LED lights (especially the LED lights in the third brake light, or Center High Mounted Stop Light) find out what they cost to replace before you agree to buy the car – and factor that cost into the price you pay for the car.

…

If you’re careful, do your due diligence – including a careful inspection of the car by a competent, trustworthy, independent mechanic (not the dealership’s mechanic) you can improve the odds in your favor. But at the end of the day, there will always be some element of risk.

It is the price you pay to . . . pay less.

Which is the major, bright and shiny Good Thing about buying a used car.

New cars lose value like the Titanic lost buoyancy after it hit the iceberg. We are talking about an average 30-40 percent drop in retail value after about five years from new. That is a huge discount for you – if you buy it used – especially given that modern cars are much longer-lived/durable than cars once were. Fifty or 75,000 miles is functionally equivalent to 15 or 20,000 miles on a ’70s-era car.

It’s more than that, actually. Because a ’70s (or even ’80s) car with 20,000 miles on it had fewer miles left on it. Most became unreliable money pits right around the 75,000 mile mark and most began to need major work after 100,000 miles or so.

But a car built within the past 10-15 years that has 100,000 miles on the clock can reasonably be counted on to go another 100,000 miles, largely trouble free.

You will surely have to spring for maintenance stuff – things like tires and brakes, maybe even a timing belt change – but the major, kill-the-car stuff (such as an engine failure) is not likely to happen before 200,000 or more miles have rolled by.

Rust is also less of a worry today than it used to be. This doesn’t mean you shouldn’t still look for it. It means it’s less apt to be a serious (as in structural) problem unless the car is 15 years old or older or was driven for years in severe winter weather, in a part of the country where lots of road salt is used to keep the roads clear.

With a new car, on the other hand, you will have peace of mind – as far as having to worry about anything unhappy bubbling up. Even if it does, the warranty will cover it – and the dealer will likely give you a loaner while yours is being fixed. And you will have this peace of mind for years – or at least for however many years the warranty remains in force.

But peace of mind isn’t free.

No matter how great a deal you make (or not) you are still going to pay a lot more for a new car than a used equivalent. Not just for the car, either. Remember what we talked about earlier in re peripherals such as insurance and property taxes.

Still, peace of mind has value, too.

This is an excerpt from Eric’s new eBook about the car buying process – which will be given out free to all EPautos subscribers. If you’d like a copy, please join our little group of Libertarian-minded gearheads! The sign up button is on the main page, top bar.