Car Shopping: Do I Buy New or Used?

By Tony Ku, Arizona State University

New or used? Color? Make and model? These are just some questions that Arizona State broadcasting junior Autumn Pappas faced when she purchased her first vehicle.

"Something of the things I looked at was checking the mileage and seeing if there was any major damage to the car," she said.

Either way – new or used – research is a must, says Sherman Weekes, new car sales manager of Tempe Toyota in Arizona.

"It's very important for all buyers," Weekes said. "They should do a lot of research on the Internet and then compare it to different product and prices out on the market."

And by simply logging onto the Internet, the resources available to car buyers are nearly limitless. More and more people are realizing that the cost of new transportation can really throw a budget into reverse. In many instances, today's new vehicle prices compare to the cost of a new home just a generation ago.

Used cars

Since dependable transportation is a necessity, do not despair; a two- to four-year-old used vehicle can be purchased at a savings of 25 to 50 percent, as compared to it's cost when new. Additionally, the number of well-built, dependable vehicles has increased during the past decade.

When well maintained, these vehicles can be driven for many miles, and used vehicles are now available at substantial savings.

Check the car's history before you buy. There are Web sites available, such as Carfax.xom, that sell a service to help protect used car shoppers by allowing prospective buyers to get a report of a vehicle's repair history using the vehicle identification number.

"By taking the time to do a VIN check, they can see if the car is a lemon, a salvaged vehicle, if it has been in an accident and such," said Weekes.

But Internet research just isn't enough when purchasing a used car. Buyers should obtain a copy of the car's service record, which can help predict whether the car is likely to perform well for another few years. Used car shoppers should also be sure that the dealership they are purchasing from offers a certification of quality, which provides a warranty for the vehicle.

New cars

For car shoppers who can afford to pay more, the methodology for purchasing a new vehicle doesn't differ much from that of finding a used car, says Ken Laba, Earnhardt Ford's sales manager in Tempe. "There are plenty of sources out there to help you find the right vehicle," he said. "A lot of manufacturers are the same, it just depends on the kind of car you like."

Laba believes that a new vehicle has advantages over a used car.

"[Students] can get some great college rebates," he said, adding that the rebates could range between $300 to $700. "You also get the warranties and for most first time buyers, they can barely make payments, so if the car breaks down, this prevents other costs."

Those extras add up, however, so keep it simple. Keep in mind that new vehicles have fewer repair problems, so paying extra for an extended warranty might be unnecessary.

Get the lowest interest rate you can. Laba added that first time buyers, even without significant amounts of credit, might be able to find low interest rates on a new car.

Resources: Buyers looking for more information should try visiting Web sites such as Kelley Blue Book , Edmunds, or Consumer Reports. These sites provide basic advice about everything, from the advantages of new and used cars to their estimated value and how to prevent from being taken advantage of by sellers. "By doing research, you will not only find the best car for you, but you'll get peace of mind, too," Weekes said.

© 2003, InCharge® Education Foundation, Inc. All rights reserved.
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