What is a Better Option- Buying a New Car or A Used Luxury One?

Luxury cars are usually ‘dream vehicles.’ The phrase itself explains that these vehicles are among those, which people aspire to purchase one day. A new luxury car may not be affordable for many, but a used luxury car can be attainable. The big question here is- Whether a used luxury car a smart choice?

Imagine that you have $30,000 to spend on your car. You can easily purchase a new non-luxury sedan like Honda Accord, having features like navigation, leather, a rearview camera, automatic climate control, etc. What if you get a deal of three-year-old BWM 328i rode for just 10,000 miles? Or how about getting a four-year-old Mercedes-Benz E-350 with 38,000 miles for $29,900? Isn’t it a tempting proposal? What will be your choice?

Let us now take a look at a few pros and cons of both the cases, buying a new car or a used luxury one.

New No-Luxury Car vs Used Luxury Car

New non-luxury Car Used Luxury Car



Perfect Condition- A new car will only have a few miles on it as you will be its first owner. You will need less maintenance with only a few oil changes and tire rotation. Nice Car- It is the reason why one purchases a luxury car. There is expensive stuff inside the car. The engines are large and more powerful, and styling is better.
More extended warranty- A new car comes with a minimum three-year warranty. You can rely on the warranty period in case of any wear and tear. Less Depreciation- The first owner of the car already has taken the depreciation hit. E.g., Honda depreciates by about $4733 in its first year, while BMW depreciates about $2903 in the first year according to Edmunds data.
Newer Technology- The new car comes with modern features, and it can apply to safety (more airbags and better crumple zone) and infotainment technology (streaming audio and better smartphone integration). Loaner Access- You will get access to a free loaner car when you go for your car’s servicing to one of the luxury brand’s dealerships.



Higher Depreciation- A new car sees its higher depreciation in its first few years which is about 21 percent. Little or No Warranty- Luxury cars have a more extended warranty, but it depends on its first user, if you are purchasing a three-year-old vehicle you may get one year warranty (two years in case you are buying it from a CPO). It is also due to old technology and less efficiency.
Vanilla Transportation- The car may not give you a luxury drive feeling. If the purpose of your car purchase is to show-off your friends and family, then a non-luxury car may not earn prestige for you, and you will have to settle with the feeling of plain-vanilla vehicle. More Maintenance- A used car needs more repairing and maintenance since it has more miles on it. Moreover, the repair costs of luxury cars are high too. It may not have all the features also like navigation and a rearview camera.

Buy the right car for you

The disadvantages of purchasing an old luxury vehicle are more than buying a non-luxury new one. It does not wholly depend on money matters. We compared the costs of used, new and a leased vehicle which shows that purchase of a used non-luxury vehicle makes more sense.

Take some time to prioritize what you are looking for in a car, and weigh all its pros and cons. The vehicle may be an emotional purchase, and you may be the happiest driving a luxury one. So, think carefully before purchasing because it is ultimately you who have to drive it and make the payments

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.