It looks like you're using an outdated browser.
For a better experience, we recommend switching to a more modern browser like Google Chrome or Microsoft Edge. Learn more.
Online Banking Login

News & Tips

Is it better to buy a used or new car?

August 20, 2021 by Jodie Kinley-Smith & Duane Daski

We’re in a strange economic time right now with many dealers having an extreme shortage of inventory due to a chip shortage. Chips, or semiconductors, play an essential role in managing vehicles’ safety devices, engine functions, and more. Because of the pandemic, U.S. automakers had to close factories to slow the spread of the virus and cancelled chip orders, expecting fewer people to buy. 

Computer-chip suppliers shifted to personal electronic devices, which continued to surge. When car buying picked up, chip manufactures could no longer meet the demand. Then, fewer trade-ins and higher prices ensued. Buyers have been turning to used vehicles due to supply and demand issues. As a result, we’re now seeing values rise for pre-owned vehicles. 

It’s difficult to determine when the shortage will end, but it’s causing a dilemma among buyers: Is it better to buy a used or new car right now? To help you decide, we’re taking a closer look at the new car vs. used car pros and cons and tips to keep in mind during the car-buying process. 

Advantages of Buying a New Car

For many, buying a new vehicle is a dream come true. You can sink into an ultra-comfortable driver’s seat and enjoy that new car smell. All the new features seem to shimmer and shine. As the first owner, you know exactly what you’re getting — bonuses without the blemishes. You’ll discover some enticing benefits, such as:   
  • Warranty Coverage: New cars have the manufacturer warranty built into their price. The bumper-to-bumper coverage, which covers every part your new ride had when you bought it, usually lasts up to three years or 36,000 miles (whichever comes first). A new car warranty can give you peace of mind. Plus, most new vehicles even include roadside assistance — so if something were to happen, you wouldn’t have to worry about the towing cost. 
  • Attractive deals: Dealerships are often highly motivated to sell new cars, so you’ll often see 0 percent interest financing or alluring cashback incentives. It’s always good to ask dealerships if they’re running any special promotions too. However, the devil’s in the details — make sure that you read of all the fine print. Most of all, if you have to pick between deals, do the math to see which option will save you the most money in the long run. 
  • Customizable options: Ready to feel like a kid in a candy store? From picking your favorite color to tech gizmos, buying a new ride often allows you to tailor it to have the latest features. You’ll also find more advanced safety features. For example, anti-collision control and exit warnings. With used vehicles, it can be difficult to make any new changes with the added expenses for parts and labor.

Disadvantages of Buying a New Car

It’s easy to ooh-la-la at all of the benefits of buying new cars. However, it’s a good idea to consider the disadvantages too, especially if you’re trying to be more financially conscious: 
  • Fast depreciation: You’ve probably heard that new vehicles lose value within seconds of driving them off the lot. Unfortunately, this is true — sometimes the value goes down as much as 20 percent. So, when you turn around to sell it, the trade-in value won’t come close to the original price. Most of the depreciation with new vehicles happens within the first two to three years. Any little paint chip or parking ding can also bring the new car’s value down even further.
  • Higher expenses: The average price of a new ride continues to climb — in the ballpark of $40,000 as of 2021. You might just take a U-turn on buying a new ride when you see the total cost with additional insurance and sales tax expenses. And once the warranties expire, it may be more expensive to repair or replace technical features or other parts because they’re so new. 

Advantages of Buying a Used Car

Used cars, or “pre-owned vehicles,” may have some history, but the price tag’s less likely to make your wallet run for the hills — usually. You have to go to the dealership to buy a new car, but with used cars, you have more options. Instead, you can look at listings from private parties and several online marketplaces. Plus, it’s possible to get a late-model used vehicle at a much lower cost than a new one. And who doesn’t love a good deal?
  • Less Expensive: Buying a used car is probably the best route for you if you’re looking to save money. You’ll also pay less overall for taxes and insurance. Plus, you can usually pay off a used car’s loan faster than with a new car. And, you won’t have to stress as much if the vehicle succumbs to a couple of nicks or scratches. 
  • Slow depreciation: Once a vehicle is a couple of years old, its depreciation rate starts to slow down. So a used car holds its value longer, which comes in handy when it’s time to sell it. Plus, you’re less likely to go “upside down” on the ride (owing more than the car is worth). 

Disadvantages of Buying a Used Car

Used cars may not seem as appealing, especially when they lack that new car smell and you don’t know why they were discarded. While used vehicles come with a couple of challenges, you can often overcome them by doing your research and exploring your options. 
  • Less reliable: Unfortunately, you won’t always know the complete history of a used car, especially when it’s being sold “as-is.” It’s a good idea to review a used automobile’s CARFAX report to verify critical information and evaluate accident reports. Used vehicles typically have higher mileage, which can compromise their lifespan. You may also be paying more with replacing parts and repairs, especially if the car’s no longer under warranty. 
  • Limited selection: If you’re looking for a specific type of vehicle with certain features, you might be disappointed if you can’t find exactly what you’re looking for. Buying a used car might mean choosing something more reliable that fits your budget. 

Car-Buying Tips

Ultimately, knowing whether you want to buy a used or new car (and the type) will on-ramp you to a smoother auto-buying process. However, don’t feel you need to rush through it. These days, most people are in the “car-buying market” for three months. Here are some tips to help you navigate the process: 
  • Do some research: Before you step onto the lot of a dealership, be sure to arm yourself with some critical details. For example, know the value of the ride you’d like to buy, as well as your trade-in — Carvana, CarMax, Kelley Blue Book can all help give you helpful estimates. With this number in mind, you can take on the steps of financing and negotiating with more ease. Also, be sure to email the dealership and request quotes on your trade-in beforehand. 
  • Explore financing options: It’s a good idea to look at your auto loan options sooner rather than later. Before you buy a new or used car, this calculator can help determine your monthly payments. You can finance an auto loan at a lender first or while you’re at the dealership. At SCCU, we offer a quick approval process, no application fees, competitive interest rates, and flexible terms for auto loans
  • Keep an open mind: As we’re in trying times with the shortage, automobiles with certain features might be out of reach for a bit. New vehicle costs are rising more than usual, and some used cars might cost just as much as their new car counterparts. However, something that fits your needs at a good price is most likely out there (it might just be in a town or two over). You can also look at how values compare for specific used and new vehicle makes and models at
  • Consider other options: Leasing can be a good short-term solution if you’d rather wait to buy a specific ride. This allows you to try out different brands/models and make lower monthly payments (depending on the car). You can learn more about the pros and cons of leasing an automobile here. As vehicles are pretty valuable right now, you could also consider selling a second or third car that you don’t use often and saving that cash for a future down payment.   

Is it better to buy a used or new car? 

Both used and new cars have attractive benefits and challenging downsides. But if you’re looking for a happy compromise, we recommend considering certified pre-owned (CPO) vehicles. They’ve undergone a detailed inspection and come with a manufacturer-backed warranty. You might be paying a little more than non-certified used vehicles, but you won’t have to stress as much about potential repairs. If you have any questions about getting an auto loan, feel free to get in touch with us. We’ll walk you through the steps and offer more tips!
Was this helpful?
Is it a Good Idea to Refinance Your Car Loan?
November 18, 2021 by Space Coast Credit Union
In many cases, people save more money in the long run after refinancing and end up with a better monthly auto loan payment. However, many other factors play a part in determining if it’s a good idea to refinance your car loan.
Tips for Applying for a Used Car Loan
October 26, 2021 by Space Coast Credit Union
Buying a used car offers a variety of benefits from saving more money to stressing less about depreciation. Nowadays, you can get a detailed history of the used car, so you have a better idea of what you’re buying. Plus, more information is available online about the reliability of a car’s make and model. While some may find used car financing to be daunting, more and more lenders make it easier than ever. Once you’ve decided to purchase a used car, here are seven steps you can take to streamline the process and help you get the best deal.
The Florida Financing Guide to Boat Loans
October 5, 2021 by Space Coast Credit Union
If you dream of enjoying the Florida waterways in a sailboat, powerboat, motorboat, cabin cruiser, or other boat type of choice, here’s what you should know about financing and the boat loan process. Fortunately, the purchase process is easier than you might think. We’ll take you through the entire process to help you find the best boat loan for you. 
How to Refinance a Car (+ When to Do It)
September 2, 2021 by Space Coast Credit Union
Refinancing a car involves replacing the current loan on your vehicle with a new loan that typically has more agreeable terms. This can take place with your current lender or with a different one. To help you navigate this process, we’re sharing the pros and cons of refinancing a vehicle, the steps involved in refinancing, and when it makes sense to do so.
Is it better to buy a used or new car?
August 20, 2021 by Jodie Kinley-Smith & Duane Daski
We’re in a strange economic time right now with many dealers having an extreme shortage of inventory due to a chip shortage. Chips, or semiconductors, play an essential role in managing vehicles’ safety devices, engine functions, and more. Because of the pandemic, U.S. automakers had to close factories to slow the spread of the virus and cancelled chip orders, expecting fewer people to buy. 
What are Common Car Loan Terms?
August 5, 2021 by Space Coast Credit Union
Do you feel like your brain’s dissolving into Jell-O as you’re exploring car loan repayment periods? It can feel overwhelming as you’re weighing the pros and cons between short-term and long-term loans. Common car loan terms usually range between 24 and 84 months—but which one is right for you?
The Essential Guide to Car Loans: Everything You Need to Know
May 21, 2021 by Space Coast Credit Union
To get the best car loan at the best rate, make sure you understand the car loan process. Read our guide to auto loans, refinancing, and more.
Car Loans Tips & Tricks
May 21, 2021 by Space Coast Credit Union
Discover four car loan tips and tricks to help navigate the car buying experience. These are important whether you’re buying new or used vehicles.
How to Make Your Loan Payment
April 1, 2021 by Space Coast Credit Union
SCCU’s loan payment process is designed to be as quick and convenient as possible, saving you two of the things you care about most – time and money.
Auto Loan Refinance: Is Now the Right Time?
May 8, 2020 by Space Coast Credit Union
There are multiple reasons choosing a credit union makes good sense when it's time to refinance.
SCCU’s Five-Minute Guide to Buying a Boat
March 12, 2020 by Gary Prager
Summer is here and there’s no better time to enjoy Florida’s great outdoors.
Tips on Buying a Used Luxury Car
September 26, 2019 by Jodie Kinley-Smith
In today’s world, many pre-owned cars are in excellent shape with low miles, especially in the luxury market.
Tips for Buying Your New Car
May 10, 2018 by Jodie Kinley-Smith
As with any major purchase, it is always a good idea to do your homework to know what you can afford. 
The Benefits of Auto Loan Pre-Approvals
December 14, 2017 by Space Coast Credit Union
Ever gone car shopping and fallen in love with a certain vehicle, only to discover you couldn’t afford the payments?
New Car Purchase? December is an Ideal Month to Buy
December 8, 2017 by Space Coast Credit Union
In fact, it's one of the best times. Here's why.
Auto Loan Refinance and Why Not to Procrastinate
October 5, 2017 by Space Coast Credit Union
We look forward to serving you and saving you money!
More Car Loan Questions and Answers
August 25, 2017 by Space Coast Credit Union
Find frequently asked car loan questions and answers, and contact us with additional questions!
How Much Can I Borrow for a Car Loan?
July 14, 2017 by Space Coast Credit Union
If it's time to shop for a new vehicle, you're probably wondering how much you can borrow for a car loan.
Pros and Cons of Refinance: Auto Loans
June 27, 2017 by Space Coast Credit Union
If you're considering refinancing a car, learn more about the advantages and disadvantages first.
Top 10 Most Reliable Cars
June 27, 2017 by Space Coast Credit Union
Reliability plays a crucial role in purchasing new car. What are the most reliable cars on the market today?
Frequently Asked Car Loan Questions
June 16, 2017 by Space Coast Credit Union
Have auto loan questions? We have answers!
What is Auto Loan GAP Insurance?
June 1, 2017 by Space Coast Credit Union
Find out what auto loan GAP insurance is, along with when and why it can be a real life saver.
SCCU’s Five-Minute Guide to Buying an RV
May 11, 2017 by Space Coast Credit Union
There’s a lot to know before you set foot on a lot. The more you research now, the better things will go.
Leasing Vs. Buying a Car
February 8, 2017 by Space Coast Credit Union
The decision to lease or buy a car is a personal one. Don't let the dealer make it for you.
7 Things to Do Before Your Next Road Trip
July 1, 2016 by Tim Alexander
One of life’s greatest pleasures can be a summer road trip to your favorite vacation destination.