New or used? Peace of mind is a crucial factor
It's hard to remember when there was a better time to consider a used car instead of a new one.
The record number of new cars and trucks sold in recent years -- fueled largely by extremely attractive rebates and low- or no-interest financing -- has created an overabundance of used cars. That gives the used-car shopper a lot of choice.
The flooded market also means depressed prices on used cars -- bad news for new-car buyers trading in their old models, but good news for bargain-hunting used-car shoppers.
Furthermore, an increasing number of certified pre-owned car plans have cropped to provide consumers with peace of mind when it comes to buying a used car.
In the end, the decision to buy new or to buy used boils down to what you can afford and what will give you peace of mind.
If you're on a tight budget, buying a used car gets you the most vehicle for the least amount of money. You can count on one hand the number of new cars that list for less than $10,000. That buys you a tiny car, probably with two doors and certainly with a manual transmission instead of an automatic, no air conditioning, a lack of safety features (antilock brakes, side-impact air bags, and so on), and few other common amenities.
For less than half the price of the average new car, you can buy a three- or four-year-old used vehicle that is larger and loaded with more features than the small, bare-bones new one.
But buying a used vehicle has its risks, which could cost you more over the life of the vehicle. You are buying a vehicle that someone else has owned and driven. You don't know how it's been driven, or how well it's been cared for. A used vehicle will require maintenance and possibly expensive repairs far sooner than a new one, and these repairs probably won't be covered by a warranty.
They want to select the color and all of the features. There's definitely a pride of ownership and peace of mind in being a vehicle's first owner. New-car advantages include:
Reduced maintenance: A new vehicle won't need maintenance for the first several thousand miles, and then only an oil change and tuneup are required. Some manufacturers cover the cost of those routine maintenance items. The new vehicle probably won't need new tires, a battery, exhaust system or brakes during the first few years.
Warranty coverage: The manufacturer warrants new vehicles for at least three years, and some warranties last longer. Many luxury makes now offer warranties of four years and 50,000 to 60,000 miles.
With manufacturer warranties, if something goes wrong, it's the responsibility of the dealer and manufacturer to fix.
In addition to the comprehensive warranty, automakers cover both corrosion resistance and the powertrain. Hyundai, Kia,
Peace of mind: If you encounter problems with your new car, you have legal recourse through state lemon laws. If you can prove a new car is a lemon, you could receive a replacement vehicle or get your money back. You also can find out if your vehicle was returned to the used-car market as a lemon by looking at the vehicle's title and using a free look-up service provided by Carfax.
Roadside assistance: Virtually all mainstream new cars and light trucks come with free roadside assistance while the vehicle remains under warranty, and, in some cases beyond. Only exotic car makers do not provide roadside assistance. In addition, some automakers reimburse you or provide alternate transportation if you are stranded far from home. A few manufacturers, including Audi, BMW, Lincoln, and
Increased choice: The automobile market -- both new and used -- has been booming. New-vehicle sales totaled almost 17 million units in 2005. The used-car market was even more vibrant, setting a record of 44.1 million sales in 2005, according to CNW Marketing Research. The result is a vast choice in used cars and attractive prices.
Improving reliability: Although used vehicles typically don't carry the same warranties as new ones, the original factory warranty on a new car is transferable to a second owner, usually at no charge.
Buyers of certified pre-owned cars from an authorized dealer can purchase a late-model used car with the original warranty and then choose to add to it. The combination of a glut of late-model used vehicles, the greater reliability and durability of vehicles, and the availability of warranties makes buying a used car less of a gamble.
Just like new: Another trend that makes buying used a better option is the proliferation of certified pre-owned programs. The idea started with luxury brands such as Lexus and Mercedes-Benz. Today, most manufacturers have instituted these programs. Sales of CPO cars have increased from 452,829 in 1997 to 1.4 million in 2005, according to CNW.
