Carbuying: New, Used or Certified? What's the difference & should I care?

used
selling

#1

My wife and I are looking to purchase a car in the next two months to replace an older vehicle we currently own. My wife previously purchased her car used from a family member, I purchased both my last two cars certified pre-owned from a dealership (not a used car lot).



We’ve both been pretty happy, but are now looking at starting a family and neither of us want to deal with the hassle of the “unknown” problems you can get with a used car. The promise of a new car warranty is also pretty enticing… but we still feel we’ll get more car for our money buying used.



Are we right to assume that?

Should we care about depreciation/devaluation of a new car?

Are we really getting a better deal buying a used car?

Are certified pre-owned vehicles really better than privately sold?


#2

Is it cheaper to buy a used car? Certainly.
Is a new car more dependable? Typically.
It’s a tradeoff.
CPO will cost more because it (should) come with some sort of a better warranty. The same used car can sometimes be bought either certified or not, depending on whether you’re willing to pay the costs associated with certifying it.
Depreciation is typically the largest cost in owning a car. Should you care? Sure, but other considerations are important, otherwise it would always make sense to buy 10-year-old cars.


#3

If you drive the car until the wheels fall off, then depreciation isn’t as big of a deal. If you get a new car every few years, then taking a 15% hit just by driving out of the dealership’s parking lot kind of sucks.

In general, a lightly used (30-40k mile) car is a good bridge between the two. Especially since many bumper-to-bumper warranties go to 50k now, so you’d still have 10k or so to find and fix problems for free.

CPO can differ by manufacturer and dealership. First, make sure it’s a Manufacturer CPO car. Sometimes dealerships will independently “certify” a car, by which I mean they stare at it for about 30 seconds, and if the doors don’t fall off, they certify it.

Manufacturer CPO generally comes with a warranty that often goes beyond the standard manufacturer’s warranty. Ask questions about this: See the warranty in writing. Make sure it’s an actual warranty, especially including electronics, and not just unlikely to fail stuff like the pistons.

As for whether or not a dealership is more or less likely to rip you off than a private seller, that’s a total crap shoot. Some dealerships are very honest and reputable, and some are just the opposite. It’s not a bad idea to to a google search for “[dealer name] complaints.” Often times the shady dealerships will have caught the attention of various car groups online.


#4

A budget would be most helpful. $10~15k, probably better off buying an off-lease vehicle. $20k, you’re gonna find some nicer new cars for that price.
Also, how many kids are you planning on having? It might make more sense to get a bigger vehicle now than to wait for the 3rd or 5th child to come along


#5

Do you plan to keep this car you are buying; 2, 4, 6, or 10 years? The longer you plan to keep it the less concerned you need to be about depreciation. If you keep a car 10 years you might be better off with a new car. That way you know the service history of the car from day 1.

If you expect to keep the car 2 to 4 years, used or certified pre-owned (which is used but with a more comprehensive warranty) might be your best option.


#6

Depending on what you’re looking for a new car can be cheaper. When I bought my car new it was sitting among the the newer redesigned models on the lot. It was heavily discounted bringing the price to less than that of year or two older used one. The interest rate was also less. There were also no unknowns as far as previous maintenance; one used car I test drove (same model as I purchased) with 35k blew the engine while accelerating onto the highway.


#7

My personal bias against buying a late model used car is that it’s probably back up for sale because there’s some problem with it. And I’d prefer not to take that chance. Older used cars can be fully checked out and you know up front it’s older. You know you’ll have an occasional problem.

Used rentals bought directly from the rental companies are a much better used car bet. They’re late model and they’re there because of a fleet upgrade. I’d guess that the overwhelming majority have absolutely nothing wrong with them.

New cars you’ll pay more for, but you get the warranty, the fun of breaking it in yourself, and much more selection to choose from. And in my case I got to piss my ex off (sorry about that one, couldn’t resist). If you choose wisely, using something like Consumer Reports to guide you, you can dramatically improve your odds of getting something with high reliability.


#8

Just This Last Week, I Was Looking At A GM Ceritified “Late” 2009, 15 Month Old Used Car (Built 5/09) With Only 10,200 Miles.

The difference is in the warranty. Being “certified” increased the original “bumper-to-bumper” warranty from 36 months / 36,000 miles to 48 months / 48,000 miles and still included the 5 year / 100,000 mile drive-train warranty.

The dealer paid GM to have the car certified and I felt it was a nice feature. This was a very tempting vehicle to put my wife into, an 09 Impala for $15k and decent warranty coverage. I’m still thinking about it. This car is like new. You should see the tires and brake rotors, etcetera ! The only draw-back is that her old Intrpepid is still going and she drives a hundred miles a day.

CSA