Senate Cents: A Financial Wellness Blog

New Car | Certified Pre-Owned Car | Used Car

Buying a car may seem like an exercise in decision making. “Should I get a coupe or a crossover? An EV or hybrid? Magnetic Gray or Firecracker Red? Do I need heated seats? Oh, I definitely need heated seats.” Well one of the first – and possibly most important – decisions you’ll have to make is whether you should buy new, or used. The factors to consider may seem overwhelming, but it really just comes down to your own personal priorities and preferences. We’ll break down the advantages and disadvantages of buying new vs. certified pre-owned or used, so you can tackle this age-old car-buying dilemma with confidence, and choose the option that’s right for you.

New Car

Pros:

Aside from that irresistible “new car smell,” and fresh-out-of-the-box appeal, the advantages of buying (or leasing) a new vehicle are numerous. Equipped with the most up-to-date technology and styling, a new vehicle will likely provide greater fuel efficiency, as well as include all the neatest bells, whistles, thing-a-majigs and doo-dads you could ever desire. And if you’re particular about, well… everything, then buying new offers the most opportunity to customize your car to your exact specifications – with add-ons such as roof racks, back-up cameras and more.

Cons:

Of course, there are a few downsides to consider when buying or leasing a new vehicle, the biggest of which is the depreciation factor. We’ve all heard the expression that a new car depreciates the second you drive it off the lot, which is true, but it continues to lose its most significant value in the first few years of use. Another (perceived) disadvantage of purchasing a new car is that the process can seem overwhelming in the number of options available to you in regards to inventory and pricing. Doing a bit of research online before heading to the dealership can help you get a handle on it. Fortunately, we know just the place to get you started.

Certified Pre-Owned Car (CPO)

Pros:

If you like the idea of a new(ish) car, but don’t necessarily like the price tag it comes with, you may want to consider buying a certified pre-owned car. CPO vehicles are “late model” (3 years or newer) used vehicles that have passed a rigorous manufacturer’s multi-point inspection process, and may include a warranty – all of which give you that extra peace of mind. And because you’re acquiring the vehicle after the largest depreciation has occurred, you’re getting that extra peace of mind for a whole lot less.

Cons:

While purchasing a CPO vehicle offers greater affordability, it offers less in terms of options. You may not get the exact car you want, although you may get pretty darn close. If you’re willing to let a few things slide in terms of exact preferences, there may be no better time than now to consider a buying a CPO vehicle.

Used Car (Pre-Owned)

Pros:

If affordability is your top priority, then buying a used (pre-owned) car may be the way to go. Considering that the vehicle has already incurred the largest drop in value over its first few years, it’ll likely be priced to please. Not to mention, insurance premiums on used cars are generally lower. Another score for your wallet.

Cons:

On the flip side, paying less, once again, means compromising on choice. You’ll probably have fewer options on makes, models and specific features. And while you may be spending less on the overall cost of the car, there may be other expenses to consider. Finance rates on loans for used cars may be higher than new or CPO vehicles, and a warranty may not be an option. Maintenance and repairs may chip away at your bank account over the course of ownership, so you’ll want to be well-informed about the quality of the vehicle before you buy.

Once you’ve gotten this Big Car Buying Decision out of the way, you’re free to focus on some of the other, more enjoyable ones… like where to take that first road trip. As it so happens, we’ve got a few suggestions.

SHOP USING TRUECAR  APPLY FOR AUTO LOAN 

Learn more about GAP Plus Coverage  Learn more about Extended Warranty

1 Limited time offer. Applicants must refer to the promotion or use the promo code “FREEGAP” when applying. GAP Coverage valued at $299. Valid only on new & used auto loans booked June 1- August 31, 2021. Members must use the USSFCU Car Buying Service powered by TrueCar and purchase an auto warranty through USSFCU during the same timeframe in order to qualify for this promotion. Qualifying members will receive a deposit into their primary savings account covering the cost of GAP no later than 5 business days after their loan is finalized. USSFCU reserves the right to modify, update or discontinue this promotion at any time and without advanced notice.

2 Guaranteed Asset Protection (GAP) is not intended to replace your automobile insurance. It does not provide bodily injury, property damage, liability, or collision insurance and does not comply with any financial responsibility or any other law mandating motor vehicle insurance. All new or used motor vehicles with a maximum loan up to $100,000 are eligible. Benefit coverage limits up to $50,000 with a loan term up to 84 months. GAP Plus may include additional costs.

3 All loans subject to credit approval. Rates & terms subject to credit history and not all applicants will qualify. View all USSFCU auto loan rates, terms and conditions at ussfcu.org/rates or call 800.374.2758. Void where prohibited.

4 For more details, complete terms and provisions for each plan, contact our Member Service Contact Center at 800.374.2758.

5 This service is provided through TrueCar and not USSFCU. Available at participating dealership only.