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Compare Costs Buy New Car vs. Used

Buying used can save you thousands upfront and over cycles of ownership, but buying new has other advantages.

While buying new cars is enticing, you should take a cold, hard look at how much you could save over time by buying used cars instead.

The average person owns 13 cars in a lifetime, each costing an average of $30,000, according to a report by the National Automobile Dealers Association. If each of those cars was 3 years old, instead of new, you could save nearly $130,000 during your lifetime.

The real money-saver in buying a used car is wrapped up in a sinister-sounding financial word: depreciation.

Car buying’s dirty little secret

Once you fully understand how car depreciation sucks money out of your wallet, you’ll learn how to save boatloads of cash over your lifetime. You often hear that a car loses 20% of its value as soon as you buy it. Yes, in just one minute, a $30,000 car will lose $6,000 as you gleefully drive off. By the end of the first year, mileage and wear and tear could bring that to 30%, or $9,000. Why don’t you feel this big hit? Because it takes effect much later, when you sell or trade in your car.

Take a look at two similar cars, one new and one used.

New-car depreciation: You buy the car for $30,000 and sell it three years later for $15,000. The car has cost you $15,000 in depreciation.

used-car depreciation: Now let’s say you buy the same car, but it's 3 years old when you buy it. You could buy the car for $15,000. Three years later you could sell it for $10,000. So the used car depreciation cost you only $5,000.

Now, if you’re paying attention, you would quickly say, “But driving a brand new car is much better!” You’re absolutely right. So, if driving a new car is worth an extra $10,000 to you, go for it. But don’t say we didn’t warn you.

Forget the old used-car stigmas

It used to be common for people to put down used cars by saying that it was just a way to buy someone else’s problems. That’s not true anymore. Here are two updates on old knocks against used cars of recent vintage.

Reliability: Cars have never been more dependable than they are today. It’s not uncommon for some cars to deliver more than 100,000 miles before needing major repairs.

Maintenance: All cars require regular maintenance such as oil changes, tire rotation, brake jobs. But you can drive today’s cars much farther in between these scheduled maintenance visits. Even tires and brake pads last much longer than before.

More used-car advantages

So it’s pretty clear that buying a used car is much cheaper and that cars in general are more dependable. But take a look at these other advantages:

Lower car insurance rates: When a vehicle is worth less, it costs less to insure it when you're buying collision and comprehensive coverage. You can also drop collision and comprehensive coverage, which pay for repairs to your car, and save even more.

Registry renewals are cheaper: The cost of registering a used car goes down every year.

Move up to a luxury car: Because you can save 30% or more, you can shop in a higher class of cars.

Less stress: Got a ding in the door? Who cares? But when it’s the first dent in your new car, it’s a huge bummer.

New-car advantages

While nearly everything about used cars costs less, buying a new car has its advantages.

New-car shopping is easier: All new cars are assumed to be perfect, so evaluating the condition isn’t a factor. No need to take it to a mechanic. Also, it’s easier to figure out what you should pay for a new car, even if the negotiation process is still a pain.

More used-car options: Automakers offer plenty of incentives to lure buyers, such as cash rebates. New car loans have better interest rates. This means you'll likely pay thousands of dollars less than the frightening sticker price once you negotiate a final price and apply the incentives.

Advanced technology: New features for comfort, performance and safety are introduced in new cars every year. You’ll need to wait several years to get them in used cars.

Peace of mind: A new car will likely be more reliable than a used one, even though pre-owned cars are much more dependable than in the past. If a new car breaks down, you can have it fixed for free under the included factory warranty, at least for the first 36,000 miles or three years that most carmakers offer.

Prestige: Let’s put it this way: You don’t hear many people bragging about the used car they just bought.

An exception to the rule

Not all cars depreciate at the same rate. Some brands are known for holding their value exceptionally well. When you add in possible new-car incentives and low-interest used-car, there are times when buying a new car doesn’t cost much more than buying a 1- or 2-year-old car.

You can find how much cars depreciate on several automotive websites, such as Kelley Blue Book’s 5-Year Cost to Own or Consumer Reports’ Cost of Vehicle Ownership.

What it means for you

Depreciation is a silent killer to your automotive budget. But by buying cars that hold their value, you can minimize the effects. If you’re still on the fence, use a car loan calculator to see how much less your monthly payment would be if you bought used instead of new.

Article Originally published on Nerdwallet.comBy Philip Reed

06/09/2021 in car buying

used cars, benefits of buying used car, why buy a used car

COV19 Precautions

In an effort to keep our customers as safe as possible and to minimize contact with other people, Carlton Car will be operating by appointment only. We will allow only one set of customers in the store at the same time and will allow time for cleaning between customer appointments. No public restrooms will be available. Please do not come in if you are experiencing and flu or cold like symptoms.

03/17/2020 in Safety Precautions

corona virus, safe dealers, cleaning

Price Reductions!

We have reduced prices on lots of quality inventory! Its a great time to buy and save thousands on reliable, affordable used cars in Denver. No dealer fees!

11/09/2019 in Great deals!

used cars denver, low priced cars, best deals used cars

New Inventory!

Lots of affordable, reliable SUV's have arrived just in time for our inevitable snow! If you are searching for a winter driver, look no further! Visit our website for the latest arrivals and great deals 

09/27/2019 in Used cars

SUV, AWD, 4WD, winter driving, cars for snow, new inventory, used cars denver. toyota 4runner, toyota RAV4, Toyota FJ Cruiser, Mercedes SUV, Mercedes ML350, Subaru Outback, Subaru Impreza, Buick Rendevous, Chevy Tahoe, Dodge Durango, Honda Ridgeline, Infi

4WD or AWD

What Is Best For Winter Driving: RWD, FWD, AWD or 4WD?

December 2, 2010 • 0 Comments • Eric Peters, Tips

By Eric Peters, Automotive Columnist

What’s the best set-up for winter-weather driving? Or just driving, generally? Is it rear-wheel-drive? Front-wheel-drive? All-wheel-drive? Or four-wheel-drive?

Here are some of the the pros and cons of each:

Four-wheel-drive (4WD)

This system is typically found in pick-up trucks and truck-based SUVs. Most 4WD systems work “part-time” — engine power goes only to the rear wheels until the driver (or, in the case of automatic systems, the onboard computer) engages the front axles. Typically, the power split front-to-rear is not adjustable. When in 4WD mode, the front wheels get 50 percent of the engine’s output and the rear wheels get the other 50 percent in a fixed-ratio split. Truck-based 4WD systems are also distinguished by the presence of a two-speed transfer case and 4WD Low range gearing, which is designed for very low-speed use in deep, unplowed snow (or off-road).

The upside: Truck-type 4WD systems are great for dealing with very heavy snow on unplowed roads and for off-road driving on muddy, uneven terrain; the Low range gearing makes it possible to crawl up steep inclines and slog through deep mud. Truck-type 4WD is great — even essential — for people who live in very rural areas or who must deal with heavy snow on unplowed country roads.

The downside: Truck-type 4WD systems usually operated in 2WD mode — with just the back wheels receiving engine power. When in 2WD mode, these vehicles often have less grip than a FWD car, which has the traction advantage of the drive wheels pulling (instead of pushing) the car and also because the weight of the engine and transmission are sitting on top of the driven wheels. In addition, 4WD systems are not designed to aid high-speed handling/traction on dry, paved roads. In fact, most 4WD systems come with warnings not to engage the 4WD on dry paved roads, because it may negatively affect handling and result in premature wear of the components.

Finally, a 4WD system adds a lot of extra weight to the vehicle, which in turn cuts down on fuel economy. While you may only need 4WD a few days out of the year, you’ll be paying for it every day by lugging around a couple hundred pounds of additional dead weight.

Not many people are aware of these significant everyday limitations of 4WD — even though the information is usually right there in the owner’s manual.

The bottom line: Buy a 4WD if you need a vehicle with serious off-road capability or have to travel often on rural (and unpaved) gravel or dirt roads – or if you live in an area subject to severe winters where it’s routine to have to drive through heavy snow on unplowed roads. Otherwise, it’s probably a money-waster.

Front-wheel-drive (FWD)

Most passenger cars being built today are front-wheel-drive — including “crossovers” that look sort of like SUVs but which are (usually) built on a car-based, FWD chassis.

The upside: FWD cars can actually be pretty tenacious in the snow because the weight of the engine/transaxle is sitting right on top of the drive wheels. FWD is vastly better in the snow than a rear-wheel-drive car. With a good set of all-season or snow tires, you will probably be able to make it to work unless the snow is really deep — in which case it’s the absence of ground clearance more than anything else that will cause you to get stuck. FWD is also more economical — both to buy “up front” and to operate over the life of the vehicle. You’re not paying extra when you buy the car — and you’re not paying every time you gas up to lug around equipment you only use a handful of times every year.

The downside: FWD cars are weight-biased toward the front, which is a built-in design limitation as far as handling/performance is concerned. Also, the wheels that propel the car must also steer the car, which isn’t optimal for high-speed driving/cornering. This is why most race cars and also high-performance cars are rear-wheel-drive. FWD is fundamentally an economy-oriented drivetrain layout designed to cut down on vehicle weight, simplify assembly and reduce manufacturing costs.

The bottom line: FWD is a good choice for the average driver who uses his vehicle to get from “a” to “b” and would like to have decent traction on those few days each winter when there’s some snow on the roads.

All-wheel-drive (AWD)

This is a system in which engine power can be sent to all four wheels — or even to individual wheels — as necessary to maintain traction. As recently as five or six years ago, only a few makes/models offered AWD systems; today, AWD is either standard or available optionally on many types of passenger cars, wagons, minivans and light-duty, car-based “crossovers.”

The upside: AWD provides excellent all-year/all-weather grip on snow-covered roads in winter and improves handling on dry (or wet) paved roads in summer. Unlike a truck-style 4WD system, AWD is optimized as much for use on smooth, paved surfaces as it is for use in snow (or even on unpaved gravel and dirt). High-performance AWD-equipped sports cars and sedans offer incredible dry-weather, on-road handling with superior wintry weather capability. Also, AWD systems do not require any driver involvement; power is automatically routed to the wheels with the most traction. And they can kick as much as 90-plus percent of the engine’s power to the front (or rear) wheels, as the traction situation dictates.

The downside: AWD is not designed for off-road use; there is no two-speed transfer case or 4WD Low range gearing. AWD can also add substantially to the purchase price of the vehicle — sometimes by as much as several thousand dollars. In some cars, AWD also usually adds significant weight to the car, which cuts both performance and fuel economy.

The bottom line: AWD is an excellent choice for the performance-minded driver who values dry-weather handling and high-speed grip in a corner as much as being able to get out of his driveway when it snows.

Rear-wheel-drive (RWD)

This was once the standard drivetrain layout of most passenger cars, especially domestic-brand models. The engine is up front — but power is sent to the rear wheels exclusively.

The upside: Rear-drive cars spread the weight of the engine, transmission and axle assemblies front to rear more evenly than nose-heavy FWD cars — and tend to be lighter (and cheaper to buy/maintain) than AWD-equipped cars. Rear-drive cars are also rugged and durable — which is why they are favored for police use/taxi duty. And finally, rear-drive allows for smoky burnouts — important to many performance car fans.

The downside: A RWD vehicle is not the hot ticket for snow driving — unless you enjoy fishtailing like a just-landed sea bass. Rear-drive (2WD) pick-ups are especially atrocious in snow; their light rear ends tend to break loose even on wet roads.

The bottom line: If you enjoy a good burnout every now and then, live in an area where winters are mild — and can handle dealing with some hassle on those few days each year when it does snow — then rear-drive will probably work for you.

09/18/2019 in 4WD AWD

winter driving, 4WD AWD snow tires