Deciding Whether to Buy a Brand-New, Certified Pre-Owned, or Used Car

You might be new car hunting as we get to 2020's tail end. But do you really want a brand-new vehicle? There are certainly reasons to go that route, but compelling reasons also exist to look in another direction.

You also have the certified pre-owned vehicle option. Then there's always a used car. Each one of them has negatives and positives, and you might feel uncertain about how to proceed.

Let's look at some of the most critical reasons why you might go for any of these three options, and also why you might decide to shun each of them.

Brand-New Car Negatives and Positives

One thing you might look at when new car shopping is the safety rating. If you're driving this vehicle, what can you expect if you're in a car accident?

If it's a brand-new vehicle, you can't look online and get accounts from car crash survivors. However, you can look at the IIHS Safety Report. This reveals:

• The vehicle's various safety features

• Its performance when the company tested it

If you get a brand-new car, it likely has top-of-the-line safety features. It might have a backup camera, lane departure alert, parallel parking assist, automatic rear braking, and much more.

However, brand-new cars are also expensive. Even if you just get the base model, you're spending more than you would for certified pre-owned or used. If you have unlimited financial resources, you might not care about that. Few people find themselves in that situation, though.

Also, the moment you hop behind the wheel and drive your new vehicle off the lot, its value drops by thousands of dollars. That's called depreciation, and it's probably the strongest argument against buying brand-new.

Certified Pre-Owned Negatives and Positives

If you don't want to drop quite as much money, but you still want a lot of the newest safety features and tech, you might look into certified pre-owned. It's an excellent way to split the difference between brand-new and used. With a certified pre-owned vehicle:

• You get a car that passed a rigorous dealer inspection

• You get a car that's virtually undamaged and has very few miles on it

For a vehicle to get that certified pre-owned distinction, you can't just get it from any car lot. It's typically only the manufacturer that gets to say that it's certified pre-owned.

You still might look at a high price tag, but it's not quite as much as getting it brand-new. The vehicle is probably not more than one or two years old. One drawback is that you won't get as long of a warranty on most of its components as you would with a brand-new one. Still, you can trust a certified pre-owned vehicle more than a used one.

Used Vehicle Negatives and Positives

If you go for a used vehicle, the price is almost always the best reason to do so. You can find many cars priced at a lot less used than either brand-new or certified pre-owned.

If you only have a particular amount of money to spend, and you don't want to take out a loan, borrow cash from a relative, etc., this limits your options. Brand-new or certified pre-owned are not on the table.

You can sometimes buy a used car for as little as a few hundred dollars. However, if you do so, it might be in pretty poor condition. When you buy brand-new or certified pre-owned, you can be sure you're not getting a lemon. If anything goes wrong with the car, it is under warranty.

That's not true with most used cars. You're buying it as-is, which is why you need to make sure a mechanic looks it over very thoroughly before you agree to the asking price. Also, a used vehicle might not cost as much, but it might have hundreds of thousands of miles on it. A breakdown is much more likely. 

You might have saved lots of money upfront, but in a couple of months, you may have to come up with a significant sum to fix a component that would be fine for years if you'd gone for brand-new or certified pre-owned.

Additional Considerations

You'll also have to consider things like whether you want to buy or lease. Maybe you have a decent amount of money to spend on your vehicle, and you want a brand-new one because it's flashy and has all the latest technology.

There's nothing necessarily wrong with that, but the longer you have the vehicle, the more the value depreciates. You could lease it instead of buying it. You might get a two-year, three-year, or five-year lease.

You can't usually do that with certified pre-owned or used. When trying to determine if this is something you want to pursue, you have to think about what you want in a car. 

If it's vital for your image to have a new vehicle every couple of years, you might be okay with leasing a brand-new one and then trading it in for the latest model every twelve or twenty-four months.

Also, if you buy used, it might be cheaper, but you may have to deal with shady dealers or private sellers. You might have limited financial resources, so you look on Craigslist or a similar site.

You may find a deal that seems too good to be true, and often, that's precisely what it is. Most people don't want to bother meeting someone they don't know and then haggling with them over the sale price.

What it typically comes down to is how much money you have to spend, whether you want to buy or lease, how important the latest tech and safety features are to you, and whether you want a more utilitarian vehicle or a flashier one.

There are reasons to go with any of the three options we spoke about here, so there's no right or wrong choice. It's more about your needs, lifestyle, and available resources.