First-Time Buyers: New, Used or Certified Pre-Owned?

CARS.COM — For first-time buyers there's a key dilemma: Should I buy a new vehicle or a used vehicle? Or should I take the third path, certified pre-owned? We detail each option below; read on for more.

Related: More #FirstTimeBuyers Advice

Why Buy New?

If you're in the market for your first car, you may be tempted to buy a new one. After all, a new car has many perks, and these perks go beyond superficial qualities, like glossy paint or the classic new-car smell. Here are some advantages in buying your first car new:

  • Peace of mind. No need to worry about a previous owner who spilled Coke on the radio or left the parking brake halfway up while driving down the interstate.
  • Factory warranty. There's no need to read the fine print about warranty-transfer restrictions. There's no need to calculate how many years or miles remain on the factory policy. You get the full length of a vehicle's bumper-to-bumper warranty, and you get the vehicle's powertrain warranty, in addition to any roadside assistance provisions. Some automakers also offer free maintenance for the first few years, as well.
  • Established pricing. MSRPs, destination fees, and factory incentives give a reasonably clear starting point for negotiations on a given new car. Used-car prices, by contrast, can vary widely depending on the specific car's condition and on supply and demand.
  • Safety. As automakers have responded to competitive and regulatory pressure, new vehicles almost always perform best in the latest crash tests. Safety features are advancing too: Forward collision warning systems are spreading but weren't readily available just a few model years ago.
  • Fewer repairs. If you're financing a new vehicle, there will be less wear and tear on your vehicle, and you most likely won't have to take your new vehicle to the shop as frequently. In buying new, you will cut costs on unexpected repairs; you simply won't have this peace of mind in buying your vehicle used.
  • Technology. If you want your car to be compatible with your favorite electronics, new cars are the way to go. Automakers can't redesign cars as fast as the electronics industry churns out new devices, and that can make even recent used cars seem like a time capsule of the obsolete. Want today's technology? It's simple: Buy new.

Why Buy Used?

Generally speaking, first-time car buyers are looking for a vehicle that doesn't cost a lot of money. A used car is, then, a good option. Used cars offer huge savings, and that factor alone led shoppers to buy 2.5 used cars for every new car in 2014. But used-car shopping is a trickier process, so you'll want to follow our tips.

Here are some advantages of buying your first car used:

  • Save money. It's not exactly a shocker, but you pay a lot more for that shiny new vehicle. Mike Sante, managing editor at Interest.com, estimates a new vehicle depreciates 20 percent "the second you've driven off the lot," and steep depreciation continues over the next few years. Used-car shoppers get to take advantage of this depreciation, snatching up the same car — albeit used — down the road for considerably less money.
  • Reliability trail. Buying a new car is a bit of a dice roll in terms of reliability, especially if you're considering a model that was just redesigned or introduced. Used cars, by contrast, offer a reliability trail paved by previous owners. Research reliability data on the model you're considering, then look up the vehicle's vehicle history report.
  • Shelf life. Properly maintained, a used, non-certified pre-owned car should last well into six-figure mileage territory, which means a 5-year-old used car should have plenty of life left. "The good news is that the Ford Focus is not the Ford Pinto," Sante said. "These cars are built to last."

Why Buy Certified Pre-Owned?

If you're a first-time buyer and you want a good compromise between the benefits of a brand-new vehicle and a used one, a certified pre-owned car may be the vehicle for you. All major automakers offer certified pre-owned programs, and they typically involve significant reconditioning, multipoint inspections and warranty extensions. Automakers seldom certify cars that have more than 80,000 miles or are older than 6 years old. So any CPO car is, by definition, low mileage and not too old.

Inspections range from 112 to more than 300 points, but don't get hooked on the number itself. Many points are cursory: Mazda's 150-point list, for example, counts whether the horn and clock work as two separate items.

As mentioned, CPO programs mix the peace of mind of a new vehicle with the savings of a used one. Naturally, you'll likely pay more for a CPO vehicle versus a typical used vehicle of the same age and mileage. Cars.com analyzed thousands of listings for five popular 2011 models in April 2015 — the Chevrolet Traverse, Ford F-150, Honda CR-V, Nissan Sentra and Toyota Camry — and found that among examples with fewer than 75,000 miles, CPO cars added from 3 to 6.2 percent to the listing price, depending on the model. That can add more than $1,000 to the price of certain used vehicles.

Of course, every situation is different, and some CPO vehicles are priced to sell. If you think the advantages of CPO vehicles are worth the cost, see our overview of industry-wide programs.

In the market for a “cheap” vehicle? Find cars priced at $6,000 or less near you.

Cars.com's Editorial department is your source for automotive news and reviews. In line with Cars.com's long-standing ethics policy, editors and reviewers don't accept gifts or free trips from automakers. The Editorial department is independent of Cars.com's advertising, sales and sponsored content departments.

 
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