Should I Buy a Used Car or Invest in a New Car?

United States
July 3, 2009 4:15pm CST
I am finally settling with the insurance over my auto accident. My decision was not to sue the insurance, but to deal with them directly. If my injuries were more extensive I would have though. Now comes the question of how to use the money. I need a different car. The one I have been driving is slowly falling apart. I can sell this car for $500 and I do believe that is what I will do. Cash for Clunkers is something that I had considered because it will give a $3500 incentive for my car toward the purchase of a new more fuel efficient car. The problem with purchasing a new car is that I would then have to make a loan payment every month. It wouldn't be a problem if we had 2 incomes. I am the only one working at the time. Yes, it would improve my credit if I could get a loan and pay it off. But, we do have pay other bills and buy food too! So, now comes the hard part of searching for a vehicle that will be road worthy, not fall apart in a couple of months, and won't leave me penniless. What do you think? Any suggestions on what type of vehicle would be worth buying?
4 people like this
21 responses
@speakeasy (4215)
• United States
3 Jul 09
A new car is NOT an investment - you lose money on it the day you drive it off the lot and the insurance payments are ridiculous. Look for a good used car that gets reasonable gas mileage and pay CASH. You will not have any monthly payments and your insurance will cost less. Since, I do not know about your family's make up or how you use your vehicle, I cannot give you advise about a specific model. However, check out makes and models at places like "Consumer Reports" and "Edmunds" to see what they say about different makes and models in the category you need for your family. After you buy your used car, take one half of what you would be spending on the monthly car payment for a new car and set it aside for car repairs and maintenence. That way when something breaks the money is there to fix it and when it finally gets to the point where it needs to be replaced, you will have cash to buy another "new" used car. I bought a 1997 Geo Metro in 2002 for $1,600 cash and it is still going strong - I gave it to my husband to replace his pickup that burned up 2 years ago so he drives it now. We have had to replace the transmission and front CV joints - but, everything else over the past 7 years has just been minor maintenance - oil changes, tuneups, tires, and a battery. I bought a 1987 Nissan Pulsar 2-1/2 years ago for $450 paid another $$1,000 for a full brake job and 4 new tires and the only major repairs since then was replacing the radiator and hoses ($950) and replacing the alternator ($195). Cost of repairs on both cars has been less than $100 a month and it is awfully hard to find ONE new car with payments as low as $100 per month and impossible to get TWO for that little.
3 people like this
@cynthiann (18613)
• Jamaica
3 Jul 09
If you want a smaller car then I drive a Toyota Yaris. It is so good and I get 35 miles to the gallon! This is a big plus for me. I am not able to give advice if you should finance it or not though. Not terribly good with finances!
2 people like this
@mmlove (20)
• United States
4 Jul 09
I always buy a used car and when I do that I always take a certified mechanic with me to look at the car to make sure that the car is in good running condition.Private car sellers and sometimes car dealers try to get over on you especially if you a women and you do not know nothing about cars.I will never invest in a new car because if you miss a payment that missed payment comes with late fees and then if you miss to many payments then they will repo your vehicle and after they repo your vehicle you is still stuck with having to pay for that vehicle or messing your credit up.Toyotas and Hondas are worth every penny and it won't leave you penniless.
@candy2306 (577)
• India
4 Jul 09
Hi dear, looking at your financial status, I wouldsuggest you to go for second-hand. It's risky but affordable. No point you buy a car andnot able to repaythe loan. Might as well you plan and decide what you really want. Go for the one that frees youfrom financial tie-ups!
@peercc (332)
• India
4 Jul 09
in this current situation you can buy a used car.
1 person likes this
@rymebristol (1786)
• Philippines
4 Jul 09
if you know how to maintain and troubleshoot a car, a second hand automobile will do the job. the only advantage of a brand new car is that, it'll takes years before any major even minor car troubles occur. not unlike in a second hand car, you don't know when will a trouble occur. but first make sure before buying a second hand car, you'll bring a mechanic with you to check for your prospective car of choice. in that way, you'll be sure that the second hand car that your going to buy is a good buy.
1 person likes this
@tundeemma (896)
• South Africa
4 Jul 09
it all depends on your maintenance culture and ability, if you believe you can maintain a new car in this period of economic recession or downtown then you can go ahead and get a new car but if you think you still need to save some more money during this recession then you should go for a fairly used car
• United States
4 Jul 09
i think you should invest in a new one if your only short by a couple hundred but if you short by a thousand then you should by a used one
1 person likes this
@RawBill1 (8541)
• Gold Coast, Australia
4 Jul 09
Sorry but there is no such thing in investing in a car! They are a financial liability, especially new ones! I would go for an older model that has already fallen in price from new. If you can afford one that is between 2 to 5 years old, that is what I recommend. Buy privately too, not from a dealer!
1 person likes this
@robert19ph (4584)
• Philippines
4 Jul 09
hello ElusiveButterfly, For me it depends to your budget. If you have extra money then you can go straight and buy the new one. This will make you feel better and less worry for you are assured that everything is okey. But if you worry about having aloan, then buying a new car can wait. Go ahead and buy for the car that you can really afford. If you have enough money, you can do that someday.
1 person likes this
@Archie0 (4835)
4 Jul 09
I f you think that it is hard for you right at this time to purchase a new car then you can go for the second hand one.You can also see if the condition of that second hand car, If it is quite good then there no wrong in taking a good conditioned car at a reall low pirce.Sometimes we can make a sharp decision by buying a old car and then investing more for futher buy of a good new brand car.And after all it depends on your choice too as in what you will like.
1 person likes this
@gcorp09 (940)
• Singapore
4 Jul 09
Well, it's quite hard to advise when we don't know much about your usage and financial situation. I will say that the first thing you have to consider is how much you can afford to pay every month for the installment, and set a reasonable budget for it. After calculating your financial portion, you can then check out the market for the types of vehicles which are within your budget. That's what we did when we are considering our first car end last year. We calculate on how much we can afford to pay for the monthly installment for our first car, after deducting all the necessary household expenses and bills. We also did an estimation on the fuel usage, and also the relevant tax involved in a car. After we had the amount, we checked out our local car forums and websites for the type of cars which will be affordable to us. As our budget is quite tight, we settle for a 2nd hand Hyundai car which is around 3 years old.
1 person likes this
@gabs8513 (48710)
• United Kingdom
4 Jul 09
Personally I would look for a good second Hand Car I do not like brand new Cars I never have done I used to hate it when I got a brand new Company Car every 3 years and they always where in for repairs for the first 6 weeks I have a VW as I have to say they are the most reliable cars I have ever come across and I bought mine second hand My Car is 6 years old now and lovely, I have had it for 3 1/2 years So me personally I would go for a good second hand one Hugs to you
1 person likes this
• United States
4 Jul 09
I would say go used. You can find some real good deals for decent cars and save a ton of cash and hassle, when you don't have to spend loans. New cars are expensive and if you are worried about making payments, probably something to stay clear from. I would buy used even if I could afford new.
1 person likes this
@stephcjh (32327)
• United States
4 Jul 09
I would definitely go with a new car if you can afford it. you do not want someone elses problem. You can also get a warranty on a new vehicle and it will be brand new and pretty much flawless.
1 person likes this
@busky5 (3165)
• Thailand
4 Jul 09
I think, buying used car that not old age( 1-2 yrs ). positive is you save money, but i must good look about it ever crash hard accident or not, and maintainent history.
1 person likes this
@jillhill (37379)
• United States
4 Jul 09
I don't know what type of vehicle you like....I bought a new one last time....I struggled through many a used car and being single the repairs were always something I dreaded. With my warranty I don't have to worry about repairs..they are taken care of by the company. I bought a little Escape as I do craft sales and needed something to haul my stuff around in....I love it! Now three more people have bought them in my family since I have gotten mine. I love it as much now.....almost three years later....as the day I bought it.
1 person likes this
@Polly1 (12647)
• United States
3 Jul 09
Good luck on finding the perfect car at the perfect price. I think right now is probably a good time to buy a new car, I imagine with the economy as it is you can get a fantastic deal. My mom bought a KIA a few years ago, she got it at a good price and loves it. Its great on gas too. It also came with a fantastic warrenty, and also road side assistance included. Happy 4th of July, I hope things have been better for you. Take care, as always its nice seeing you, xoxoxo
1 person likes this
@katsmeow1213 (28910)
• United States
3 Jul 09
If you don't think you can afford monthly car payments, then do not finance a car. It will hurt your credit more than help if you end up late on any payments. We've just bought 2 used vehicles. My van was purchased a bit over a year ago for $1200. It's a great van. It does have a leak in the power steering, and the temperature gauge goes out of control, so yeah it has it's issues. It's currently in need of repair because it won't start, but otherwise has been a reliable vehicle for the past year. I'm hoping it will get me through at least another year at which point I'll upgrade for a slightly newer van. Hubby's car was just purchased a few months ago, from a dealer. We bought it outright for $3,000. It's given us a couple headaches and it does still need a few repairs, but it gets hubby to and from work everyday like he needs. I suggest buying from an owner and not a dealer. Owners are usually more honest!
1 person likes this
@peavey (16956)
• United States
20 Jul 09
I think you've made the right choice in not buying a new car. Get a copy of Consumer Reports to see which used cars are the least expensive, maintenance-wise and which are the most trouble free. That's where I would start.