New cars are a poor investment. Instant, and sometimes dramatic, depreciation of a new car makes a lightly used car the smarter financial decision.
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Aside from allowing someone else to absorb thousands of dollars in lost value, though, buying a used car is a bigger gamble. Furthermore, in an era when car companies make annual advances in terms of engineering and technology, vehicles age prematurely. A used car that is just a few years old may lack specific equipment that you want on your next vehicle.
Whether you should buy a new car or a used car is dependent on your specific situation. If you’re leaning toward a factory-fresh set of wheels, these are the 8 best reasons to buy a new car.
According to J.D. Power, more than half of car buyers claim that after exterior and interior styling, reliability is the most important factor when choosing a vehicle. Because new cars are typically more reliable than used cars, consumers are likely better served by choosing a new one instead of a used one.
Qualified language is necessary here because reliability means different things to different people. Especially in recent years, consumer dissatisfaction with user experience and design has colored perceptions of quality and reliability.
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For example, new car buyers frequently find touchscreen infotainment systems difficult and confusing to use. Dual-clutch automated manual transmissions that don’t sound or feel like traditional automatic transmissions produce a greater number of owner complaints. Misunderstood safety technology causes consternation in drivers.
Keep in mind that the modern definition of reliability encompasses matters of design, user experience, and expectations of operation in addition to outright component failure. Choosing a simpler, less complex vehicle is often the best path to trouble-free car ownership.
New cars come with a warranty, and some are quite generous. This means that if something does break or fails to work as designed or intended, you can get it replaced at no cost.
When it comes to warranty coverage, Hyundai and Kia provide the best programs, with Mitsubishi close behind. Buy a new Hyundai or Kia, and these automakers provide the following coverage:
• Powertrain warranty: 10 years or 100,000 miles
• Vehicle warranty: 5 years or 60,000 miles
• Rust warranty: 7 years with unlimited mileage
• Hybrid battery warranty: Guaranteed for the life of the vehicle
• Roadside assistance program: 5 years with unlimited mileage
In 2016, Toyota supplies the least favorable warranty program, supplying industry minimum coverage combined with the shortest roadside assistance program of any volume automaker.
During the past half-decade, the Insurance Institute for Highway Safety (IIHS) has set the safety agenda and requirements for the automotive industry, pushing beyond the minimum standards required by the federal government.
After giving car companies advance notice that it was doing so, the IIHS developed the small overlap frontal impact crash test, which measures how well a vehicle’s underlying structure deflects collision force when an impact occurs at the front corner of a vehicle. This test is designed to replicate what happens when two vehicles collide on a 2-lane road where one driver has veered across the yellow line, or when a driver departs from the lane of travel and strikes a tree or other large object such as a parked car.
In turn, this new test and the passing grade that would lead to a “Top Safety Pick” designation led automakers to develop stronger and more robust vehicle structures that do a better job of protecting occupants.
Budgets being what they are, some companies have been caught cutting corners. For example, when Ford redesigned the F-150 pickup for the 2015 model year, Automotive News reported that the company installed steel structural enhancements to ensure top crash-test performance for the volume-selling crew cab version of the truck, but did not add them to the regular cab and extended cab models. Ford has since announced that it has applied such countermeasures to the 2016 model-year F-150.
A champion of collision avoidance technologies, the IIHS has also demonstrated how automatic emergency braking systems dramatically reduce the number of car accidents. Reserved for luxury-brand vehicles just a few years ago, many new mainstream vehicles offer this technology now, perhaps most notably the 2016 Scion iA, which costs $17,595.
4.) Fuel Economy
In 2025, the U.S. new vehicle fleet must average 54.5 mpg, posing quite a challenge for a market in which pickup trucks and SUVs are the most popular vehicle choices.
Nevertheless, automakers are rising to the challenge. From installing automatic engine stop/start systems and cylinder deactivation technologies to building new vehicles with lightweight materials and aerodynamic designs, new cars are more fuel-efficient than ever.
Though consumer interest in efficient vehicles is directly correlated to the price of gasoline, car companies must strive to meet federal regulations lest they face significant penalties. That means that a new car will almost always be more fuel-efficient than a used car. In turn, that means a new car will make its owner happier when gasoline prices spike again.
Buttons and knobs are terrific, but a new generation of smartphone-native car shoppers is arriving in dealership showrooms. Internet connectivity, smartphone projection technology, voice-texting, and access to social media feeds are increasingly important to younger buyers. The newer the car, the more technologically advanced it will be.
This applies to safety technology, too. Collision avoidance technologies are proving to reduce accidents, and they are becoming more widely available in mainstream models. Honda is doing a particularly good job of making features such as forward collision warning, automatic emergency braking, and road departure prevention systems available at affordable price points. Now, if it would just swap LameWatch (excuse us, LaneWatch) for a proper blind spot warning system, it would be clearly leading the industry in this regard.
6.) Big Discounts
Choose a new vehicle in a competitive segment, perhaps one that isn’t selling as well as its competition, perhaps one that is left over from the previous model year, and you can secure a big discount, one large enough to help offset the vehicle’s loss of value the moment you drive it away from the dealership.
If you have the luxury of choosing a specific time to buy, it is better to wait until the end of the month, the end of the model year, or the end of the calendar year. Some people may argue that this isn’t true. Until automakers stop providing dealerships with volume-based incentive programs, and stop competing for best-selling model or brand status, and better manage inventory levels in advance of new model year production, chances are good that your dealership will be more likely to wheel and deal at those times.
Also, keep in mind that if you’re buying a hot new model, or a vehicle in high demand and short supply, you’re not going to get a big discount. In fact, you may pay a price premium.
7.) Attractive Financing
Historically low interest rates and vehicle loan terms that commonly span six years have made new car ownership a reality for more people. Financial institutions also typically offer more attractive interest rates for new vehicles than they do for used vehicles.
Yes, the payments for a new vehicle are higher than the payments for a used vehicle, and it takes longer to pay off a new vehicle loan. However, for as long as buyers can obtain no-interest and exceptionally low-interest car loans, a new car could be within the grasp of someone who might otherwise have no choice but to buy a used car.
8.) Knowing the Vehicle’s History
When you buy a new car, you know that vehicle’s history. You know how it was cared for, where it was serviced, how it was driven, and whether it was involved in an accident. When you buy a used car, you never really know for sure.
While CarFax reports and stronger laws have helped to reduce the possibility that a used car buyer might get stuck with someone else’s problem, a new car is rarely a problem. And when it is, a warranty protects the buyer.