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Saco Valley Credit Union
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Saco Valley Credit Union
Mobile Banking App

Free - On the App Store

New or Used Vehicles – Which Should You Buy?

There is no right answer when it comes to whether you should purchase a new or used vehicle. There are benefits and drawbacks to both. It all depends on your situation and what you are looking for in a vehicle.

When looking for a vehicle, you might want to consider a NEW vehicle if you are looking to have the most up-to-date safety features, wanting something with little to no mileage, if you want specific features among other things. You also get the manufacturer’s warranty and many times new vehicles have the most favorable financing options and manufacturer rebates and incentives. Additionally, you may be getting a model that has a new design and additional features that were not included in prior model years.

Things to keep in mind when purchasing a new vehicle though are that the vehicle is going to immediately depreciate as soon as you drive it off the lot. If you are putting little to no money down, this means that you will owe more than the car is worth should you get in an accident and total it. Another drawback to buying a new vehicle is you will likely have to pay more in insurance and registration.

When buying a USED car, you may not be able to choose the exact features like you can when buying a new car, but you do get the benefit of it already being a used car, meaning that the value doesn’t change as drastically as when you drive a new car off the lot. It is also likely to cost less to register and insure because it is older and has already depreciated in value. 

However, when buying used you don’t know how the prior owner treated the car. Usually, a dealership will check it out and make sure everything is running correctly, but how an owner drives and how well they care for a car can affect how long a car lasts. Another drawback of buying used is that there may be caveats when financing. For example, finance companies may have different rates for new and used vehicles, with used at a higher rate. Other institutions may not finance vehicles at the low auto loan rates if they are beyond a certain age (for example more than 10 model years old). 

So let’s do some math. We looked at 2 vehicles – same makes, models, trim and options from the same dealership. The only difference was that one of them was new and one was used (one model year older with 17,000 miles on it). The pricing, discounts and rebates are directly from the dealership website. In this scenario, we assume that a special 1.9% APR is available from the manufacturer for new vehicles, the buyer has excellent credit, no money is being put down and the APR for the used car is from your local credit union. 

New Vehicle:
MSRP: $45,030
Rebates: $4,750
Sales Tax: $2,215
Registration/Excise: $1,118
Insurance: $750
Financing: 1.9% APR


List Price: $35,833
Discounts: $3,934
Sales Tax: $1,754
Registration/Excise: $826
Insurance: $500
Financing: 2.83% APR


Total cost of the car (principal and interest for the life of the loan)+ 1 year of insurance and registration:
New: $46,112
Used: $36,959
Difference: $9,153


While this is just an example for one vehicle, it’s a good scenario to look at for any vehicle. In this scenario, is buying a new car worth $9,153 more to you than buying a car that’s a year older with 17,000 miles on it? In some situations, it may be worth it to buy new – for new safety features, design aesthetic, and peace of mind. In other situations, you may be perfectly happy saving a little extra money by going for a slightly older vehicle. Regardless of whether you are looking to purchase a new or used vehicle, apply online for our low-rate auto loans!


The above finance information is provided as an example only and does not depict actual rates, terms, or other credit available. Cost example assumes a 48-month loan term. These terms and rates should not be considered an advertisement for products or services and are used for scenario purposes only. New car payment example: $42,495 at 1.9%apr for 48 months would have 47 monthly payments of $919.58 and a final payment of $919.22. Used car payment example: $33,653 at 2.83% apr for 48 months would have 47 monthly payments of $741.87  and a final payment of $741.78.For available rate and term information, click here to visit our auto loan page. The registration cost estimate was provided by the Saco, ME registration estimate calculator that is available on the City of Saco website.