Car Buying

Buying a Car: How Much Do You Really Save By Buying Used?

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author photo by Doug DeMuro August 2015

If you're interested in buying a car, you've probably realized that you can save a little money -- and sometimes more than just a little -- by buying a used model. But what kind of discount should you expect by choosing a used model instead of a new one? And more importantly, do you actually end up saving any money in the long run? We're taking a quick look to help you figure it out.

New vs. Used: The Savings

There's no question that you'll save money up front when you buy a used car over a new one. For proof, just take a look at lightly used 2013 models on Autotrader compared to their brand-new 2015 counterparts. Drivers can usually save a lot of money by simply going back a couple model years and picking up a used version of the car they want, rather than opting for a brand new one off a dealer's lot.

But just how much can you save? It depends on a lot of factors -- like mileage, age and desirability. A 2-year-old Subaru Outback may offer more savings than a 2-year-old Honda Accord, for instance -- but that's because the Outback has just been redesigned, unlike the Accord. To many buyers, that means a 2-year-old Outback uses the previous model's styling and technology, while the Accord is still fairly fresh. Meanwhile, a 2-year-old Accord with 40,000 miles will offer much more savings than one with 5,000 miles.

Still, you can usually expect to save at least a few thousand dollars off the price of a brand-new model by picking a used version. And, of course, you should expect to save even more if you're willing to consider older models with even higher miles.

The Drawbacks

But picking up a used car isn't all about saving money up front. Yes, it's true, you'll get a good deal off a new model -- but at what cost? If you choose a car that's 2 or 3 years old, the primary drawback is warranty coverage: you might be at the end of a car's bumper-to-bumper coverage and rapidly approaching the end of its powertrain warranty, too. That means you'll have to pay out of pocket for parts that break, while a new car buyer wouldn't have to think about those items for a while.

But warranty coverage isn't the only drawback. A car that's 2 or 3 years old will also have 2- or 3-year-old tires and brakes, which means you'll be that much closer to replacing them. And new cars are often available with far better interest rates than their used counterparts -- even if the used models are just a year or two old -- which can work out to additional expenses in the long run.

Do You Save Money in the End?

So do you actually save money by buying a used car? Our answer is a resounding "maybe," depending on the vehicle, the age of the used car in question, and exactly what you're paying.

In general, though, we think you can save money by buying a car that's 1 or 2 years old, compared to a brand-new model -- but we understand that many shoppers would rather pay the premium for a new car than take the gamble on a used model. Given the potential drawbacks we've listed above, that makes sense to us, too.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Buying a Car: How Much Do You Really Save By Buying Used? - Autotrader