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Should you buy a new car or used car?

If you have decided you need your first car, or you need to replace an existing a car, then you are at the crossroads of the “new car vs old car” decision. Unfortunately, there isn’t a simple answer to this as either way you go has positives or negatives attached to it. Let’s run through some of these so you can make an informed decision next time you are considering a getting a vehicle.

Budgeting

A critical part of your “new car vs old car” decision is the money involved. How much can you afford to spend?  Fortunately, this is easy with some of the online tools on the web. A good one is Bank of America’s monthly car payment calculator.

If you have a vehicle to trade in, you’ll want to know its value so you can factor that into your budget too. Sites like Kelly Blue Book are good places to start.

As you focus on that monthly budget number, be sure to include the costs of gas, insurance and maintenance because these items are necessary costs when owning and using any car.

Adding all these items up will give you a target monthly payment.

Vehicle research

It is best if you have a good idea what kind of car you want to buy before you go to a dealer. If not, you may be presented with many alternatives on the spot and it’s going to be difficult to choose right there.

Start your research on the web. You’ll want to know if the car you’re thinking of buying has been given high marks for safety, is reliable in terms of repairs, and has good owner satisfaction.

When you have settled on a specific car or range of cars, go online and see if a local dealer has one that you can take for a test drive.

Should you buy a new car?

Buying a new car from an authorized dealer gets you the security of buying a product that is factory-fresh with no misuse. Buying a new car is also exciting; you get the latest technology and that wonderful new car smell. You also get maximum miles of use because you literally start with 0 miles.

Should you buy a used car?

For many people, buying a used car is a better choice than buying a new car. The first owner of the vehicle has absorbed the first chunk of the vehicle’s depreciation so you may be getting more car for the money. Other positives include lower purchase price, lower registration fees, and lower insurance premiums. Negatives to buying a used car: no manufacturers warranty and reduced reliability due to age.

We asked our friends at Len Stoler Chrysler of Westminster, a local Dodge, Chrysler, Jeep, Ram dealer in Westminster, MD for their opinion and they suggested that prospective used car buyers may want to get a copy of the CarFax on the car you are considering.

Buying a used car from a dealer vs. a private individual

First, the FTC Used Car Rule requires car dealers to post a document in every used car that reveals whether the vehicle is being sold as is or with a warranty, the terms and conditions of any warranty, and the vehicle systems covered by the warranty.

When you buy a used car from a private individual, the Used Car Rule doesn’t apply. A private sale is generally an “as is” transaction. This means you’ll have to pay for anything that goes wrong after you take possession of the car. This is truly a “buyer beware” situation.

A final thought

If you are buying a used car, you might want to hire a mechanic to inspect the car. Many independent repair shops offer a “used car inspection” for just this purchase and typical charges are $25 to $35.