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.
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.