While it appears a straightforward decision at first glance, choosing between a new or used vehicle is actually more involved when you examine all the pros and cons. Take a look at this overview before making up your mind.

Advantages of Purchasing a New Vehicle

• Factory warranty. A brand-new vehicle's warranty generally has greater coverage
• Lower financing rate, generally. Remember to compare not only vehicles but also their payments
• Full range of leasing options. When you buy from a dealership, you will have access to more financing options
• Lemon Law coverage. If you purchase a new vehicle that is defective, you have more protection and a greater chance for reimbursement under state Lemon Laws
• Freedom to choose your own features and options. You can customize your new vehicle to your satisfaction. You will also have access to the latest safety and comfort features

Disadvantages of Purchasing a New Vehicle

• Higher purchase price and higher monthly payments. You pay more for the convenience a new vehicle brings
• New vehicles depreciate in value rapidly. Many new vehicles lose about 40% of their value within three years. After three years, depreciation slows down

Advantages of Purchasing a Used or "Pre-Owned" Vehicle

• Lower purchase price and lower monthly payments. A used vehicle is generally less expensive.

• Major depreciation has already occurred. The previous owner has absorbed the cost of depreciation
• Greater price variation between similar makes and models can lead to increased savings. Different sellers have different motivations so used vehicles usually have a wide range of prices for similar models

Disadvantages of Purchasing a Used or "Pre-Owned" Vehicle

• Less choice. There are fewer opportunities to customize your vehicle to your specific needs
• Other costs. Be aware that you may need to invest in new tires, a tuneup, new seat covers or cosmetic repair jobs
• Inheriting a vehicle's past wear and tear. Buying a vehicle without knowing its full history could mean you will need to make costly repairs
• Little or no warranty. Used vehicles can have warranties, but they usually are not as comprehensive as the coverage for a new vehicle
• Limited or no leasing options. You may not encounter the same flexibility in financing as new vehicle owners

Certified pre-owned vehicles are a great option to consider if any of the above issues are troubling your purchase decision.