When it comes to purchasing a vehicle, one of the most significant decisions you'll face is whether to buy new or pre-owned. As we approach the end of summer, the new model year is winding down, and attractive discounts are being advertised everywhere. In these dynamic economic times, does the conventional wisdom still hold true that it's cheaper to buy used rather than new? Our analysis provided some new, and sometimes surprising, insights.
To crunch the numbers, we examined current deals for several popular 2022-model-year sedans and SUVs and compared them to used-car prices for the same models from 2020 and 2018. In some cases, with a slight increase in monthly payments, you can get a new vehicle with no mileage and a full manufacturer warranty.
To illustrate our findings, the data below shows the differences for five Consumer Reports recommended vehicles: the Ford Fusion and Honda Accord sedans, and the Acura MDX, Hyundai Santa Fe, and Ford Edge SUVs. The 2020 models have 29,500 miles, and the 2018 models have 47,000 miles. The monthly payment is calculated with the assumption that the buyer puts 10% down on a 5-year loan. For the new vehicles, the price listed is MSRP before incentives; for the used cars, the data shows the actual market price. The calculations are based on the average New York metro-area financing rate of 3.365% for new cars and 3.310% for used cars, according to Bankrate.com. In examining current financing rates across five local areas, new car interest rates are similar to used car rates.
| Vehicle Model | Year | Mileage | Monthly Payment | Warranty |
|---|---|---|---|---|
| Ford Fusion | 2022 | 0 | $534 | 3-year, 36,000 miles |
| Ford Fusion | 2020 | 29,500 | $505 | Varies by dealer |
| Ford Fusion | 2018 | 47,000 | $476 | Varies by dealer |
| Honda Accord | 2022 | 0 | $550 | 3-year, 36,000 miles |
| Honda Accord | 2020 | 29,500 | $520 | Varies by dealer |
| Honda Accord | 2018 | 47,000 | $490 | Varies by dealer |
A Ford Fusion is an example where a new vehicle might be worth considering over a 2-year-old vehicle. The slightly refreshed 2022 model could cost $534 per month, while the 2020 version would run $505. For an extra $29 per month, totaling $1,766 over the loan term, you get the new car with zero miles on the odometer and a full 3-year, 36,000-mile warranty.
However, opting for the new vehicle could save you over $8,000 in addition to $119 less per month, which might offset the mileage and maintenance costs. Here, new trumps almost new, although used can be a valid way to save money.
The Acura MDX is another case where the 2018 version might be a better deal, but in certain cases like the Ford Fusion and Honda Accord, for under $100 more per month, you could drive away with the new model, as they are both discounted until the all-new 2023 models arrive.
These examples show that especially towards the end of the model year, the deals available can make it worth choosing a new car over a used one, but it's essential to do your research. There isn't a one-size-fits-all answer that suits all scenarios.
When considering the out-the-door cost, don't look solely at the purchase price, but also how much the vehicle will cost you to own over time. Factors such as depreciation, insurance, financing, fuel costs, and other operating expenses can add up over the years and may make that deal not look so good in the long run.
In conclusion, whether to buy a new or pre-owned vehicle depends on various factors, including your financial situation, the specific models you're considering, and the deals available at the time. Always do thorough research and consider the long-term costs of ownership before making your decision.
How to Instantly Lower Car Windows Using Your Key Fob
Unlocking your car and rolling down the windows before you even get inside can be a game-changer, especially on hot days. This little-known feature, available in many modern vehicles, allows you to cool down your car without having to open the door first. Here's how it works and why you should start using it.
The Ultimate Guide to Instantly Lowering Car Windows with Your Key Remote
On scorching sunny days, the interior of your car can become unbearably hot, regardless of the outside temperature. When you approach your vehicle and find it sweltering, the first thing you likely want to do is lower the windows and crank up the air conditioning. However, did you know there's a convenient feature that allows you to start cooling your car without even getting inside? This feature, which has been around for years but remains unknown to many car owners, enables you to lower your windows using your key remote.
The Best Way to Instantly Lower Your Car Windows Using the Key Fob
Discover a hidden feature in many modern cars that allows you to lower your windows remotely using your key fob. This handy trick can help cool down your vehicle before you even get inside, making those hot summer days a bit more bearable.
