Comparing Car Types
In making this comparison, we assumed that cost is a key factor. (If you can afford to buy that brand-new BMW, you probably don't need this guide). The crucial points are:
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- Initial affordability
- Depreciation
- Length of warranty
- Loss of car if totaled
In addition to cost, we compared new economy cars to cars at two age milestones to demonstrate the differences in each of these categories:
- Initial depreciation
- End of basic warranty
- End of drivetrain warranty
Also influencing this analysis is the fact that the youngest drivers are considered highly likely to bust up their first car.
| Comparing Car Types | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Weigh the pros and cons of new economy cars, 2-year-old used midsize cars and 5-year-old used cars in various categories. | ||||||||||||||
| Approach | Pros | Cons | ||||||||||||
| Safety | ||||||||||||||
| New economy | New equipment; dual front airbags standard | Small, light cars are less safe* | ||||||||||||
| 2-year-old used | May be safer than new economy car; safer than older cars | No distinct disadvantage | ||||||||||||
| 5-year-old used | No distinct advantage | System failure a possibility; fewer, less refined safety systems | ||||||||||||
| Style | ||||||||||||||
| New economy | Choice of options | Base models have few features; not much style | ||||||||||||
| 2-year-old used | All styles available; more features for less money | No choice on options | ||||||||||||
| 5-year-old used | More versions of each model available; more features for less | No choice on options; condition is a greater factor | ||||||||||||
| Price | ||||||||||||||
| New economy | Good selection of vehicles in the $10,000 to $15,000 range | You pay more for new cars; extras drive up price | ||||||||||||
| 2-year-old used | Greatest depreciation has passed | Midsize used sedan for price of new economy car | ||||||||||||
| 5-year-old used | Lowest price | The best-kept vehicles are more expensive; more repairs are likely | ||||||||||||
| Replacement | ||||||||||||||
| New economy | You're likely to have to carry full insurance | Depreciation cost can't be recovered; insurance may increase when collecting a replacement settlement | ||||||||||||
| 2-year-old used | If insurance refunds the market value, and that's the price you originally paid, you break even on the settlement | If not insured, you carry the loss; if insured, your premiums may increase | ||||||||||||
| 5-year-old used | Least cash loss of the three scenarios | Without full coverage, you have no car and no money | ||||||||||||
| Repair | ||||||||||||||
| New economy | Least likely to need repair; under warranty | None | ||||||||||||
| 2-year-old used | Still under warranty in most cases; powertrain warranties may last longer and manufacturers may extend warranties on certified pre-owned cars | In some cases, warranty has ended; you'll pay more to get a certified pre-owned car | ||||||||||||
| 5-year-old used | Cars last longer than ever; some warranties exceed five years | More frequent repairs; most warranties have expired | ||||||||||||
*In 2005, small cars from 1 to 3 years old accounted for 106 driver deaths per 1 million registered passenger vehicles. Midsize cars from 1 to 3 years old accounted for 70 driver deaths per 1 million registered passenger vehicles. | ||||||||||||||