Cost-Benefit Analysis: To Purchase New or Used

Cost-Benefit Analysis: To Purchase New or UsedBuying a car is a stressful responsibility, oftentimes bringing people to the point of pulling their hair out. There’s just so much to analyze, where do you even begin? Usually, the first thing to decide is whether to purchase a new or used car. This is a big decision in itself because you have to evaluate the most cost-effective pick for now and in the long run. We’ve taken the time to put together a cost-benefit analysis to help you make the most educated decision for a significant piece of your life.

New Car Costs

Let’s start with the obvious: new cars are more expensive than used. You’re paying for updated technology and untouched mechanics, plus the insurance and registration costs are higher as well. And you’ll never really get your money back when you sell your car down the line. Your car takes at least a 20% hit to its value as soon as you drive it off the lot thanks to depreciation, and it continues to decrease the longer you have your car.

Used Car Costs

Of course, if you’ve thought about whether to purchase new or used cars, you’ve been reminded that you’ll be buying a vehicle with wear and tear to an unknown degree. The car will have about 50 thousand or more miles if you’re looking at a relatively light price tag. And with those miles come impending repairs every car owner has to deal with, but you’ll be dealing with them sooner. You also don’t know how the car’s been handled, so there’s a chance the vehicle is aged even further.

New Car Benefits

But of course, thanks to the nature of a cost-benefit analysis, we’re also allowed to look at the bright side of your purchase. When you’re buying new, as we said before, you’re getting the new technology. Even if you’re not into your car looking like a space ship, it adds value to it later in life if you need to sell it. And, since there’s no mechanical deterioration to assess, some people prefer buying new cars simply because it’s “easier.”

Used Car Benefits

“Used” doesn’t always mean the car’s cheap because it’s beaten and busted up. You could be looking at a two-year-old car with low mileage and still find that the price tag is significantly smaller than a new model’s. In fact, statistics show that buying a used car will reduce the cost by at least 30% of its original value. And even if the car is more than just a few years old, you can rest assured in the fact that most cars have been produced to be dependable, functioning at top-tier performance for a longer period of time.

Overall, it’s your decision to make, and where you’re willing to sacrifice. Among expert opinions such as the senior director of insights for Kelley Blue Book, finding a certified pre-owned car between two to three years old is the sweet spot for value and longevity. And for any repairs or adjustments needing to be made, visit trustworthy shops such as Wrecktify Collision Repair so your new (or used) car is in good hands and you get the most life and value out of your vehicle. Contact us today for more information!

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