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Buying a new car vs. buying used

January 31st, 2007 at 11:26 am

The allure of a new vehicle can be powerful, but three times as many used vehicles are sold each year in this country than new cars. Your budget and mindset -- some people just can't stand the idea of "buying someone else's trouble'' -- may determine which is right for you. If you're on the fence, here's a breakdown of benefits and drawbacks.

New-car benefits and drawbacks

Benefits Drawbacks
It comes with a comprehensive manufacturer's warranty of at least three years or 36,000 miles that will cover almost any eventuality. Some go to 10 years or 100,000 miles.
It will likely have the latest safety, comfort and convenience features available.
There are no surprises. You are the first owner and there are no doubts about previous mechanical problems or accidents.

It will cost significantly more than a three-year-old used car.
Comprehensive and theft insurance costs could be significantly higher than buying used, although insurers offer discounts for newer safety features.
It will lose 25 to 40 percent of its value the moment you buy it, likely locking you in to long-term ownership.

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