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When the time comes to shop for a car, you have a few different options. There’s no one-size-fits-all rule for car shopping. For some, financing a brand-new car makes sense. For others, grabbing an economical used model is better. Or, you may choose to split the difference and grab a certified pre-owned ride. The one you choose will depend a few different factors like your budget, your credit, and the specific kind of ride you’re looking for.
At McCarthy, we’re all about setting buyers up with the best deal possible. In order to clear things up once and for all, here’s a handy list of the pros and cons of each, so you can make an informed decision about the right option for you.
New cars are… well, new. They’ve never been owned or leased, so they’re still in pristine factory-fresh condition. They generally have less than a few hundred or so miles on the odometer, and they’re covered by the manufacturer’s new car warranty.
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The most obvious benefit of buying a new vehicle is that you know for certain that it’s mechanically sound and aesthetically pristine.
This goes hand-in-hand with the point about new condition. As long as you keep up with proper maintenance, you can confidently drive a new vehicle for a long, long time, free of worry about it breaking down.
Since the car is new, the manufacturer stands behind it with coverage far longer than any other warranty available, and the warranty comes included at no additional cost. These warranties are wide-ranging, and typically cover general mechanical and electrical components, the powertrain, body rust protection, EV battery, and any factory defects. Many new vehicle warranties also include perks like roadside assistance.
Because a new car is seen as a less risky investment to manufacturers and third-party lenders, new cars often have the lowest loan APR on the market.
Automakers regularly issue killer deals on new car loans, which may include anything from a reduced down payment to 0% interest for a certain term.
Buying a new vehicle guarantees you the latest and greatest in infotainment, comfort, and safety features.
Dealerships can help you pick the exact trim, color, features, and dealer-added goodies you’re after, so you can get the exact car you want without having to shop around.
New cars will lose their overall worth much faster than other cars due to the gap between retail and wholesale value. However, the rate of depreciation will level out relatively quickly as long as the car is well-maintained.
Despite lower interest rates, new cars still have the highest price tags, and they’ll often require a significant down payment to secure.
Every once in a while, some new vehicles will come from the factory with inherent defects. These will be covered by the warranty, and they’ll be fixed at no cost, but they can still be a bit of a headache.
Certified pre-owned cars are used vehicles that meet certain requirements regarding their quality and condition. These cars are usually either trade-ins or former leases. In order to qualify for the certified pre-owned (CPO) program, cars must go through a rigorous multi-point inspection and refurbishing process to ensure that they’re as close to like-new quality as possible. CPO cars are almost always covered under a limited manufacturer warranty, too.
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CPOs are extensively inspected by certified professionals, so you can buy with the utmost confidence that they’re reliable for the long haul.
Factory warranties often still apply to CPO cars, so you may be entitled to years of powertrain and bumper-to-bumper coverage, depending on the specific age of the vehicle. Extended CPO warranties are also available at little or no cost. So, are CPO warranties worth it? Absolutely. Specific warranty stipulations differ between manufacturers, so be sure to do your research.
Franchised dealerships often have dozens of CPO cars of the same or similar models, so you’ll have a one-stop shop for your pick of the litter.
Like new cars, automakers sometimes run finance deals and limited offers on their certified models.
They may be certified, but since they’re still pre-owned vehicles, you won’t be paying new car prices.
Because new cars lose significant value after they’re bought, CPO cars can be a better investment because they’re still relatively new, but the most severe depreciation period has already come and gone.
CPO vehicles are thoroughly inspected and they often have well under 100,000 miles, but there’s still a slightly higher chance of things wearing out or breaking compared to new cars.
Due to the more robust evaluation process before they’re put up for sale, the dealership has to increase the cost a bit to break even. CPO cars are also inherently worth more than other used vehicles because of their proven solid condition.
Used cars are any previously owned vehicles that do not meet CPO requirements. Since not all pre-owned cars are certified, the terms “used” and “pre-owned” are pretty much interchangeable. These cars may still be eligible for independent warranty coverage.
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A car’s value is directly tied to its mileage and condition, so the older the car is, the less it tends to cost. This can result in a fantastic deal—you may even be able to pay cash for it, if you’re a good saver.
In spite of used car loans having a tendency toward higher interest rates, the overall lower cost means that they can be your best bet to score a super affordable payment. Used car loans are relatively short-term compared to new car loans, so the payoff can be significantly quicker as well.
Used cars are already well past the point where depreciation is a significant factor, so if you find a dependable used vehicle, they can be an incredible short-to-medium-term investment.
Not only is it cheaper to insure used cars in general, but if you buy it with cash or pay off the loan in full, you’ll only need to carry liability insurance in most states, if you so choose.
Used vehicles typically only go through detailing and basic service before they hit the lot, so it can be a bit of a gamble to buy one. The good news is, dealerships will often allow you to test drive or have it inspected by your own mechanic, and you can also ask for a vehicle history report, which will tell you about any major damage or mechanical malfunctions.
Because a used car is a riskier investment, banks, credit unions, and loan companies may offer a steeper rate.
Finding a decent used car that checks all of your boxes can be a needle in a haystack situation. You may find yourself scouring the internet for weeks, then traveling hundreds of miles to inspect the vehicle of your choice, only to discover it isn’t all it cracked up to be. That’s why, when searching for used cars, it’s beneficial to find a dealership with a large fleet of used vehicles.
Whether you’re in the market for new, used, or certified pre-owned, McCarthy has you covered with one of the best selections in the Midwest. Get ahold of us on the phone or on our website to ask about certified pre-owned RAM trucks for sale in Kansas City.
While great effort is made to ensure the accuracy of the information on this site, errors can occur. Please verify all pricing information with a customer service representative. This is easily done by calling us or visiting us at the dealership.
Customer may not qualify for ALL Rebates shown. Some rebates are stackable and others can and cannot be combined. See Dealer For Complete Details.
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