When in the market for your next car, your first consideration is often whether to buy new or used. Buying a brand-new sedan certainly has its benefits. Most notably, new cars can have the very latest safety gear and engineering improvements. And with a new car, you know what you're getting, and it is backed by a comprehensive factory warranty. You don't have to worry about potential service problems or concealed collision damage. Further, you can have your choice of color, trim line, and options. Financing rates are also typically lower than those on used vehicles.
The key drawback with buying a new car is rapid depreciation. A new car can shed half of its value in its first three years on the road. If you have financed the new car with a low down payment, you can easily find yourself œupside down" on the loan, owing more than the car is worth.
Used cars can be a welcome alternative. The used-car market is about three times the size of the new-car market, so there's certainly plenty of choice out there. One of the best strategies is to find a car you like that's only a few years old. Such a car has already taken its biggest depreciation hit, which works to your advantage, but it should still have most of its useful life ahead of it. Modern cars, if soundly maintained, can stay on the road for 200,000 miles or longer. Rust, for example, isn't nearly the problem it was years ago. Solid-state electronics have eliminated the need for a lot of regular servicing that was necessary in the past.
The key to selecting a good used sedan is to focus on reliability, even when a prospective automobile is still covered by its original factory warranty. Look for a car that has done well in our reliability judgments. For many years the reliability stars in our records have mostly been Japanese-nameplate models, especially those from Honda, Subaru, and Toyota. But a handful of domestic models have been standouts, too.
CR's reliability scores are no guarantee, of course, but they do carry the weight of probability. If you shop for sedans with top-notch reliability scores, the odds are on your side. At the same time, every used car is unique. A careful prepurchase inspection remains a vital part of the process. If you do your homework and take care in the car selection, a used sedan can save you significant money in the long run.
Whether buying new or used, it is important to do research so you can choose a good model, and follow that up with effective negotiation.
Learn more in our guides to buying a new or used car.