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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsNeither a new car nor a used car is automatically the better value. Compare the specific vehicles over the same ownership period and mileage, including purchase price, financing, insurance, fuel, maintenance, repairs, depreciation and expected resale. New can be worth the premium if warranty coverage, a known history or a particular configuration matters to you; used can cost less overall if its condition and repair risk are acceptable and its full ownership cost is lower.
What “better value” means
The better-value car is the one that meets your needs at the lower total expected cost—or delivers benefits you consider worth paying more for. A low sticker price or monthly payment does not settle the question. The CFPB recommends adding the vehicle’s upfront cost and features to ongoing expenses such as interest, insurance and routine maintenance when assessing its true cost. CFPB: How much can I afford to borrow for a car or auto loan?
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There is no reliable universal percentage by which used cars are cheaper to own. The difference depends on the exact models and their prices, condition, loan terms, insurance quotes, mileage, location and how long you keep them. Compare candidates, not broad labels.
Start by defining what you need the car to do. Consider required size, intended use, essential safety or technology features, approximate annual mileage and how long you expect to keep it. A new and used candidate do not have to be identical, but they should satisfy the same basic needs. Otherwise, you may end up comparing a low-priced car that does not fit your requirements with a more expensive one that does.
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Then set a comparison period—such as the number of years you realistically expect to own each vehicle—and use approximately the same mileage for both. Your estimate will not predict every cost, but a consistent horizon makes the comparison more useful. Include what you expect to pay during that period, then account for what you could receive when selling the car. Do not compare one vehicle’s short-term cost with another’s cost over a longer period.
What the available ownership-cost figures can—and can’t—tell you
AAA’s 2026 release estimates annual ownership costs of $12,863 for a new vehicle under its study assumptions. It describes depreciation as the largest single cost in its analysis and attributes the increase over its previous estimate to multiple cost components. This is a modeled new-vehicle estimate, not a personal budget quote or a like-for-like comparison with used cars. AAA 2026 new-vehicle ownership-cost estimate
AAA’s 2025 release put its modeled average cost to own and operate a new car at $11,577 per year. Its analysis considered depreciation, financing, fuel, insurance, license and registration taxes, maintenance, repairs and tires. That older benchmark also describes new cars; it does not establish the average cost gap between a comparable new and used vehicle. AAA 2025 new-car cost estimate
Use these figures as context for the kinds of expenses ownership can involve—not as a prediction for your budget. Your car category, annual mileage, location, financing, insurance and ownership period can all change the result. Build your comparison from current quotes and estimates for the actual vehicles you are considering.
In particular, do not subtract AAA’s 2025 figure from its 2026 figure and treat the difference as a forecast for your own costs, or use either figure as an estimate for a used car. The two releases are benchmarks for modeled new-vehicle costs, not a controlled new-versus-used comparison for matching vehicles. The available data does not establish a current average savings amount for buying used.
When a new car may be the better value
You want a new-vehicle warranty and a known history
A new car gives you a clear starting point for ownership history and may include manufacturer warranty coverage. That can make costs more predictable, but it does not eliminate loan interest, depreciation, insurance or expenses the warranty excludes. Check the specific warranty’s coverage and duration rather than treating “new” as protection against every repair bill.
Warranty certainty is a benefit to weigh, not a guarantee that the new car will cost less over time. Ask what is covered and for how long, and identify any costs that remain your responsibility. For a fair comparison, check the used candidate’s remaining manufacturer coverage and any dealer warranty too. A used car with meaningful coverage could narrow the practical difference, while a new car’s warranty may be valuable to a buyer who would have difficulty absorbing an unexpected repair.
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You need a particular configuration or feature
If a specific safety feature, technology package, body style or set of options is essential, a new vehicle may be the more practical way to get the configuration you want. Decide which features are requirements and which are preferences; otherwise, paying for extras can inflate the comparison without improving the value you actually need.
Write down the features you cannot do without before looking at listings. This helps prevent a comparison from drifting toward a more expensive trim or optional package simply because it is available. If a used vehicle has the required features, include it in the comparison; if it does not, it is not an equivalent alternative for your purposes.
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You can comfortably absorb the purchase and ownership costs
A new car is more plausible when its out-the-door price, finance charges, insurance and likely depreciation fit your budget without relying on a stretched loan term or an optimistic resale estimate. Warranty coverage and certainty have value only if their benefit is worth the extra cost to you.
Look beyond whether you can make the monthly payment. The ongoing budget also has to allow for insurance, fuel, maintenance, tires, registration and any costs not covered by warranty. If the total only works under assumptions that are uncertain—such as a high resale estimate or a loan stretched to produce a low payment—revisit the comparison or consider other candidates.
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The complete cost is lower, not just the asking price
A lower used-car price can leave room in your budget, but the saving can shrink if the loan costs more, insurance is higher, or the car needs repairs, tires or overdue maintenance. Include the expected resale value at the end of your planned ownership period: depreciation is the value lost between purchase and sale, not simply a general assumption that every used car is inexpensive to own.
Compare the used vehicle’s actual out-the-door price with the new vehicle’s, rather than comparing a used listing price with a new car’s price before taxes and fees. Ask for taxes and fees in writing and identify optional add-ons separately. For either car, keep the amount you pay for the vehicle distinct from optional products so you can see what is driving the total.
Its condition and coverage stand up to scrutiny
A used car is a stronger value candidate when its condition, history, warranty status and likely repair needs are sufficiently clear. A low-mileage or certified vehicle may command a price premium, so compare that premium with the actual coverage and condition rather than assuming certification makes the car a bargain.
Ask what the certification or warranty actually includes and review the paperwork. Check remaining manufacturer coverage and any dealer warranty for limitations, deductibles and exclusions. Also distinguish a warranty from a service contract: a service contract is separate, and its terms should be read and compared with coverage the car already has. Do not pay for coverage on the assumption that it duplicates a benefit you need, or that it covers every repair.
You can manage the repair risk
Consider whether you have savings for unexpected repairs and whether a repair would disrupt work, caregiving or other essential travel. A lower expected cost can still be a poor fit if you cannot absorb the uncertainty. No source assigns a dollar value to preferences such as warranty certainty or avoiding repair delays; make those trade-offs explicitly in your own decision.
For a used car, an inspection can uncover issues that change the calculation. Ask the independent mechanic for a written assessment and repair estimate, then add needed work to your expected costs. If the findings make the car’s condition or risk unacceptable, walking away is a valid result of the comparison.
Compare the two candidates on the same basis
Choose one new car and one used car that meet the same needs, then compare them over the same planned ownership period and approximate mileage. Use written prices and current quotes where possible. Keep optional add-ons separate so they do not obscure the vehicle’s actual price.
| Cost or factor | What to compare |
|---|---|
| Out-the-door price | Negotiated vehicle price plus taxes and fees. Identify optional add-ons separately. |
| Financing | Down payment, APR, loan term, amount financed, finance charge and total paid. Compare written offers, not monthly payment alone. |
| Depreciation and resale | Estimate what each specific vehicle may be worth when you expect to sell it; account for the difference between purchase price and expected resale. |
| Insurance | Request quotes for the exact vehicle and your driver profile. Do not assume new or used will always be cheaper to insure. |
| Fuel and routine costs | Estimate fuel using your expected mileage and the candidate vehicle. Include routine maintenance, tires and registration. |
| Repairs and warranty | Check remaining manufacturer coverage and any dealer warranty, including limits, deductibles and exclusions. Estimate likely repairs outside coverage. |
| Fit and risk tolerance | Account for how long you will keep the car, annual mileage, required features, available repair savings and tolerance for unexpected costs. |
For each car, total the costs you expect to pay during the comparison period, then subtract the estimated resale proceeds. Use the same assumptions for both cars where they apply. A cash buyer can also consider the opportunity cost of using cash, but the available figures do not quantify it; judge it against your own alternatives rather than inserting an unsupported amount.
A simple comparison worksheet can help keep assumptions visible:
- Write down each vehicle’s out-the-door price and any optional add-ons separately.
- Record the financing terms for the actual offer you could accept, or note that you would pay cash.
- Estimate insurance, fuel, routine service, tires and registration over the same period and mileage.
- For the used car, add any inspection-estimated work and consider repairs outside warranty coverage.
- Estimate each car’s resale proceeds at the end of the period, and subtract that figure from the costs you expect to pay.
- Compare the resulting totals alongside the nonfinancial differences, such as features, warranty coverage and repair uncertainty.
The estimates will not be exact, especially for future resale and repairs. That is why it helps to note where a number came from—such as a written quote, an inspection estimate or your own assumption—and to avoid making one candidate look better by using optimistic assumptions for it and cautious ones for the other.
Compare financing by total cost, not payment size
Get a written financing preapproval and the dealer’s written offer, then compare the APR, term, amount financed, finance charge and total paid. A smaller payment can result from borrowing for longer, and it does not mean the loan is cheaper. The FTC cautions that low-payment offers may involve longer loan periods and higher interest rates, making them more expensive overall. FTC: Buying a Used Car From a Dealer
Use the same discipline whether financing new or used. A price difference between the two vehicles does not tell you which loan is better: compare the actual written offers. A longer term can make a payment look manageable while increasing the time you are making payments and the total paid. Review the term and total finance charge alongside the payment, not after you have already decided based on the monthly number.
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- Compare the loan terms. Check down payment, APR, term, amount financed, finance charge and total payments for each offer.
- Check the budget beyond the loan. Add insurance, fuel, routine service, registration and an allowance for repairs appropriate to the vehicle’s condition and warranty.
Check a used car before you commit
For a dealer sale in the United States, read the Buyers Guide displayed on the used vehicle. It indicates whether the car is being sold “as is” or with a warranty. Review any warranty paperwork for its scope, limits, deductible and exclusions, and get promises from the seller in writing. State warranty and return rules can differ, so do not assume a general rule applies everywhere.
Do not treat a seller’s verbal assurance as a substitute for paperwork. Confirm what the Buyers Guide and warranty documents say, and ask for any additional promise in writing before you buy. If the sale is “as is,” understand that the listed warranty coverage is not there; consider that exposure when deciding whether the car fits your budget and risk tolerance.
- Read the Buyers Guide and warranty documents. Confirm whether the sale is “as is” or covered by a warranty, and understand what is and is not covered.
- Review the vehicle history and open recalls. Treat a history report as one source of information, not proof that the car is mechanically sound.
- Arrange an independent mechanical inspection. Ask a mechanic you choose to inspect the vehicle and provide a written assessment and repair estimate before purchase.
- Use the inspection to reassess the price. Add necessary repairs to the ownership-cost comparison or walk away if the condition or risk no longer fits your budget.
The FTC states that “A vehicle history report is not a substitute for an independent vehicle inspection.” A history report can inform your review, but it does not replace having a mechanic assess the actual car. Dealer-certified status does not remove the need for your own due diligence. FTC guidance on buying a used car from a dealer
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A practical decision checklist
- Set your required size, intended use, essential features, annual mileage and likely ownership period.
- Get a written out-the-door price for each candidate before discussing monthly payments.
- Compare written financing offers by APR, term, amount financed, finance charge and total paid.
- Request insurance quotes for the exact vehicles and estimate fuel and routine service.
- Estimate each vehicle’s resale value at your planned sale date and account for depreciation.
- For a used car, review its Buyers Guide, warranty paperwork, history and open recall status; obtain an independent written inspection and repair estimate.
- Compare the resulting costs with the value you place on warranty coverage, a known history, a specific configuration and repair certainty.
Before treating the comparison as complete, check that both vehicles are being evaluated with the same time horizon and approximate mileage. Make sure the figures reflect current quotes for your own driver profile and location, not a general assumption that one category is always cheaper. Separate facts you can verify from estimates you have to make, particularly future resale and repair costs. If a key number is unknown, note the uncertainty rather than presenting the result as exact.
Which should you choose?
Choose the new car if its warranty, history and configuration are worth the added cost and you can afford the total ownership commitment. Choose the used car if its verified condition and coverage make its expected full cost lower, and you can manage the remaining repair risk. If neither vehicle has clear pricing, comparable financing and realistic ownership-cost estimates, keep looking rather than deciding from the monthly payment or asking price alone.
In short, the useful question is not simply “Is it better to buy a new or used car?” It is whether this specific new car or this specific used car better fits your budget, use and tolerance for uncertainty over the time you expect to own it. A used car can be worth it when its price and condition produce a lower expected total; a new car can be the better choice when its coverage, known starting history or configuration justify the added cost. Neither outcome is guaranteed by the model year alone.
Frequently Asked Questions
Is it better to buy a new or used car?
There is no universal winner. Compare specific candidates over the same planned ownership period and approximate mileage, including out-the-door price, financing, insurance, fuel, maintenance, repairs, depreciation and resale. Then weigh practical differences such as warranty coverage, configuration and repair risk.
Which is cheaper to own, a new or used car?
It depends on the vehicles and your circumstances. A used car’s lower purchase price can be offset by financing, insurance or repair costs, while a new car can involve greater purchase cost and depreciation. Get candidate-specific quotes and estimates rather than relying on a universal savings percentage.
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Should I buy new or used if I’m financing?
Compare written offers for each candidate by APR, term, down payment, amount financed, finance charge and total paid—not by monthly payment alone. A low payment may reflect a longer loan period or higher interest rate and can cost more overall. Include insurance and other ownership costs too.
Is a used car worth it if it is certified or low-mileage?
It may be, but neither label guarantees a bargain. Compare any price premium with the vehicle’s actual condition and the specific warranty coverage, limits, deductibles and exclusions. Review its history and arrange an independent mechanical inspection.
Is a vehicle history report enough when buying a used car?
No. The FTC says a vehicle history report is not a substitute for an independent vehicle inspection. Review the report and open recall status, but have a mechanic you choose inspect the car and provide a written assessment and repair estimate.
What costs should I compare besides the car’s price?
Compare financing, insurance, fuel, routine maintenance, tires, registration, repairs, depreciation and expected resale over the same ownership period. Use written out-the-door prices and current insurance and financing quotes where possible.
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The Bottom Line
Bottom line: Compare the actual new and used cars you would buy over the same ownership period and mileage. Count financing, insurance, fuel, maintenance, repairs and depreciation, then subtract likely resale proceeds. New may justify a higher cost through warranty coverage, a known history or the right configuration; used may be the better value when its price, condition and coverage make its full expected cost lower. Verify prices and quotes, and have any used car independently inspected.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
