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

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Cars.com photo by Kelsey Mays

For first-time buyers there's a key dilemma: Should I buy new or used? Or should I take the third path, certified pre-owned?

We detail each option below.

Related: More #FirstTimeBuyers Advice

Why Buy New?

Buying a new car has many perks, and they go beyond superficial qualities like shiny paint and a new-car smell. Consider some advantages of buying 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 or calculate how many years or miles remain on the factory policy. You get the full length of a car's bumper-to-bumper and powertrain warranties, plus any roadside-assistance provisions. Some automakers also offer free maintenance for the first few years.
  • 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 cars 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.
  • 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? Buy new.

Why Buy Used?

Used cars offer huge savings, and that factor alone drove shoppers to buy 2.5 used cars for every new car in 2014. But used-car shopping is a trickier process, and you'll want to follow our tips.

Here are some advantages of buying a used car:

  • Save money. It's not exactly a shocker, but you pay a lot more for that shiny new car. Mike Sante, managing editor at Interest.com, estimates a new car 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, snatching up the same car — albeit used — down the road for considerably less.
  • 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 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 CPO?

All major automakers offer certified pre-owned programs, and they typically involve significant reconditioning, multipoint inspections and warranty extensions. Automakers seldom certify cars that are more than 6 years old or have more than 80,000 miles, so any CPO car is, by definition, 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 you might expect, CPO programs mix the peace of mind of a new car with the savings of a used one. Naturally, you'll likely pay more for a CPO car versus a typical used car 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 cars.

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

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

Advice Car Buying Certified Pre Owned First Time Buyers Used Cars

Senior Consumer Affairs Editor Kelsey Mays likes quality, reliability, safety and practicality. But he also likes a fair price.  Email Kelsey