Should I Buy a New, Used or Certified Pre-Owned Car?

202303-new-used-cpo-car-lot New, used and CPO cars | illustration by Paul Dolan

First-time shoppers have a lot to think about when buying a car: What make and model fits my needs? What features should I look for? What will fit my budget? To further complicate matters, the lingering effects of the inventory shortage make it more difficult to answer another common question: Should I buy a new, used or certified pre-owned car? We detail each option below; read on for more.

Related: More First Time Buyers 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 offers many perks that go beyond superficial qualities, like glossy paint or the classic new-car smell. Here are some advantages of buying your first car new:

  • Peace of mind. You won’t have to wonder if a previous owner spilled Coke on the car’s speakers 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 or calculate how many years or miles remain on the factory policy. You get the full length of a vehicle’s bumper-to-bumper and powertrain warranties 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 how much you can expect to pay for a new car. Used-car prices, by contrast, can vary widely depending on the specific car’s condition and on supply and demand; they have also seen more dramatic fluctuations amid the inventory shortage.
  • Affordable options. While new vehicles carry higher average prices than comparable used models, affordable options can be found across a variety of vehicle types. A recent value analysis identified a list of budget-friendly new sedans, SUVs, pickup trucks and electric vehicles that don’t require sacrificing important safety and tech features.
  • 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: For example, forward collision warning and automatic emergency braking systems have become standard in many newer vehicles but weren’t readily available in older cars.
  • Fewer repairs. Just as vehicle prices have climbed recently, so have repair costs. If you go with a new vehicle, you won’t have to worry about excessive wear and tear or damage from previous accidents. This means you most likely won’t have to take it 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 the latest tech features like wireless Apple CarPlay and Android Auto, new cars are the way to go — wireless smartphone connectivity only recently became more widely available.

Why Buy Used?

Generally speaking, first-time car buyers are looking for a vehicle that doesn’t cost a lot. Even as used-car prices have jumped dramatically in recent years, a used vehicle will cost less, on average, than its new-car counterpart. Among dealers, the median price for model-year 2018-22 used vehicles was approximately $31,000 as of February 2023, while the median for new cars was around $44,000.

A used car can be a smart choice when it comes to saving money, but used-car shopping is a trickier process, so you’ll want to follow our tips. Here are some advantages of buying your car used:

  • Save money. It’s not exactly a shocker, but you pay a lot more for that shiny new vehicle. A lot of the vehicle’s value is lost to depreciation within the first few years of ownership, as well: On average, a new vehicle loses 20% of its value after the first year and continues to depreciate by about 10% until it hits the five-year mark, according to Experian. 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. When properly maintained, a used car should last well into six-figure mileage territory, which means a 5-year-old used car should have plenty of life left. That being said, it’s also important to understand the risks of a used car with too many miles on the odometer.

Why Buy Certified Pre-Owned?

If you’re a first-time buyer and want a good compromise between the benefits of a brand-new vehicle and a used one, a CPO car may be the vehicle for you. All major automakers offer CPO programs, and they typically involve significant reconditioning, multipoint inspections and warranty extensions. CPO inspections range from 112 to more than 300 points, but don’t get hooked on the number itself. Many points are cursory: Mazda’s 160-point list, for example, includes checking the car’s horn and clock as two separate items.

Automakers typically cap the mileage and age of a CPO vehicle at 80,000 miles or 6 years old, so most CPO cars are, by definition, low mileage and not too old. Recently, automakers like Nissan and Honda have extended their CPO coverage to vehicles up to 10 years old. While these programs come with significantly shorter warranties, they may provide lower-cost options for shoppers who want extra assurance when buying an older vehicle.

In addition to the extended warranties and inspections, many CPO programs offer bonus perks, such as special financing rates, roadside assistance, and SiriusXM and OnStar trials.

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. 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 $8,000 or less near you.

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