How to Decide if You Should Buy a New or Used Car

There’s nothing like the smell of a brand new car. But there’s also nothing like the price tag of the latest vehicle off the lot, or the financial drain of those monthly car payments. 

Making the decision as to whether to buy a new or used car is no easy task, and to be clear, there’s no right answer. The best decision is the one that works for you, your goals, and your budget. Here are a few things to consider when trying to make that very important choice.


It only takes a few minutes of searching online to find that cars range in price from a thousand dollars to numbers exceeding the price of your favorite celebrity’s home.

When you’re considering the amount you can afford, consider whether you are paying cash or if you are taking on a monthly car payment. Remember, it’s always critical to have several months worth of savings in the bank, so don’t blow the bank account on a new vehicle.

However, paying more upfront can help reduce your monthly bill. Because a car loan is a debt, US News and World Report recommends not having your car payment exceed more than one-third of your monthly take home pay. You can use their helpful calculator to determine what amount best fits your budget.

See what financing deals car dealerships are offering. Some have rates as low as 0 percent for those with a qualifying credit score.

Depending on the time of the year, you can also get some great deals on cars. The end of the year is one of the best, according to Kelley Blue Book, but you can also find better prices toward the end of the month or right as the latest model of vehicles are pulling into lots in the fall.

Finally, consider how much you might be spending on repairs and maintenance costs if you’re choosing a much older vehicle.


When considering new versus used, think about what your lifestyle goals are for this car. Are you planning for a family, and hoping to get as much mileage and as many seats out of the vehicle as possible? In that case, it might be worth going for a newer, more reliable vehicle that’s worth the investment now.

Perhaps you need a sturdy vehicle to take you on roadtrips or uneven terrain. It might be better to have a reliable vehicle in that case, which, if not new, at least has a lesser amount of wear and tear.

However, you might just need a commuter vehicle that’s going to get you to the park and ride or transport your high school teenager (and least experienced driver) to school, in which case, it might be more worth your money to get an older car.


Whether you’re buying new or used, consider trust: is the car maker known for being reliable? Is the dealership offering any sort of warranties? How important are these aspects to you?

While cars will always lose their value over time, some retain theirs more so than others. If you might sell your vehicle in a few years, perhaps pick one that holds its value.

When purchasing a used vehicle, you can run a vehicle history report to see maintenance records, accidents, or whether the odometer reading is accurate. When buying online, check that the site is reliable and protects against scammers. Investopedia offers a resource for the best online dealerships.

And remember, when buying a car, whether used or new, check in with your car insurance to get the best coverage for you and your vehicle. 

Have other questions about auto insurance? Contact a Sea Mountain Auto Insurance Specialist today.