August 2022 - Mercer Savings Bank

On the lookout for a new vehicle? Maybe your old car has finally passed into the great beyond, or maybe you’re just looking for a change. Either way, the biggest question churning in your mind should be: new or used? The answer really comes down to your personal preferences and financial situation. However, there are positives and negatives to each.Pros and Cons of Buying A New VehicleBuying new may seem like the best option. There are many benefits to buying a new car instead of a used one.First, you know the car’s history. Since you are the original owner, you don’t need to worry about previous owners, accidents, or questionable modifications. This car will be custom-built just for you. It will also have the latest safety systems in place, as well as a warranty.So, what could be wrong with buying a new vehicle? Outside of increased cost, the biggest issue you will run into is depreciation. The moment you leave the lot, your car becomes “used,” dropping in value by anywhere from 9-11%. It doesn’t get much better from there.After the first year, the total market value of your car drops to 81% of its original value. During the first five years, a new car drops in value by 15% to 25% every year. This can make your original investment seem like a mistake. However, if you plan to keep the car for the long term and keep the maintenance up, the life of a new car will likely stretch to meet your needs.Related: Try our auto loan calculator to see what your payment could be >> Pros and Cons of Buying A Used VehicleIf you’re looking to save some money or your finances are a little tight, a used car may be the best option for you. The amount of money you will save on the purchase will be great, but you will also save on the cost of insurance as well. With this extra money available, you may be able to step up to a newer model than what you were originally searching for. Even buying a car that’s 1-2 years old can save you serious money compared to buying a brand-new model.The biggest drawback to buying used is the cost of maintenance, especially when your vehicle passes the 100,000-mile marker. Also, the lifespan on the car, even when taken care of, is much shorter than that of a new vehicle.Lastly, if your used car is older, it may not have the latest technology and safety features expected from newer vehicles. But if you don’t care about keeping up with the Joneses in terms of technology and you don’t mind spending a few extra dollars on maintenance, the amount of money you will save on your overall investment is well worth buying used instead of new.That said, it’s important to do your research before buying a used vehicle. One way to do that is by ordering a vehicle history report for about $25 to learn more about what the vehicle has been through. You’ll just need the vehicle identification number (VIN) or license plate number.Used vs. Certified Pre-OwnedFor those who want the peace of mind of buying a new car but don’t want to pay the full sticker price, certified pre-owned vehicles are an option. These vehicles are lightly used, generally for a few years or less, and come with a manufacturer’s warranty. They’ve typically been used as leases, loaner vehicles, or cars for dealership staff.Certified pre-owned vehicles are only available at their respective dealerships – for example, an Outback at a Subaru dealership.Moving ForwardNo matter what car you decide to purchase, Mercer Savings Bank offers competitive rates and personalized service. Our auto loan process is streamlined to help you get on the road faster.Talk to one of our experienced loan officers today to learn more.Contact Us

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Car-Buying: New or Used?

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