What’s Better To Buy Now: a New or Used Car?
Joseph from Arizona asks: "I know that conventional wisdom is that buying a used car offers better value in most cases. I need to get a new vehicle because my 2005 car has finally given up.
“Given the current conditions in the new and used markets, has the situation changed to where it’s better to buy new at this time?”
Clark’s Take on Whether It’s Best To Buy a New or Used Car Right Now
Clark says: When you're comparison shopping between new and used cars, aim for a used vehicle that's three years old with a savings threshold of at least one-third.
“If you can buy that three-year-old vehicle for a third less than what a new one would be, then go ahead and buy the three-year-old used vehicle,” Clark says. “On the other hand, if the gap is less than that, that would push you more toward buying a new one.”
Clark has long been a fan of buying used vehicles around three years old because the brunt of the depreciation gets eaten by the first owner.
With that being said, he acknowledges that there are extreme shortages in the car market right now.
“For a while earlier this year, there were bigger inventory issues in the used vehicle market than in the new. That is no longer true,” Clark says. “New vehicle sellers are facing extreme inventory issues. If you drive past new vehicle dealer lots, you’ll see how empty most of them are.”
He adds that by doing the math, you’ll be able to choose a new or used car that makes the most sense for your wallet.
“Looking at a three-year-old vehicle of a particular make and model that you’re interested in — and then comparing it to the price of a new one of that make and model — is how you’ll be able to make that best decision,” he says.
Here are more tips from Clark on how to buy a new car or a used car.
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