Every year, car buyers struggle to solve a complex puzzle. What kind of car to choose? New or used? The answer isn’t so clear-cut in 2022.
A couple of years ago, the choice between buying a new or used car was much more straightforward. All you had to do was figure out how much money you wanted to spend, what kind of body you wanted, and what type of fuel your vehicle should be using.
Not anymore.
As semiconductor makers are trying to meet the fast-growing demand from consumer electronics manufacturers, automotive manufacturers are finding it increasingly difficult to source in-vehicle chips. It means that buying a new car has become much more complicated. Some models have disappeared from price lists, and waiting times can be more than a year for some others.
The used car market is also not in the best shape. The shortage of new cars has pushed up the price of used vehicles to unprecedented highs, making the choice between new and old even more complex.
So, if you are determined to replace or perhaps purchase your first car in 2022, there are things to consider. To help disentangle this riddle — let’s see whether you should choose a new or used car in 2022.
What you need to know before getting a new or used car
Buying a car is both an exciting and stressful experience. As a prospective buyer, there are a few things you should address before going through with it.
Personal requirements. This is the most important factor to consider when purchasing a vehicle. It doesn’t matter if it’s a new or used car. Your next purchase can be much more rewarding than you might think if you get your preferences straight.
But what are the pros and cons of going for a new or used car?
Why or why not to buy a new car?
Prince Philip, Duke of Edinburgh, once said that when a man opens the car door for his wife, it’s either a new car or a new wife.
That’s one of the biggest draws of getting a brand new car – it’s just more exciting than the alternative!
Yet that’s not all there is to it: every new car opens the door to a world where advanced technological solutions bring a range of handy benefits. Those aren’t the only reasons to get a new car, either:
- Reliability. Car manufacturers have long been able to improve the performance of internal combustion engines and other moving parts. That’s why, with proper maintenance, a new car will always excel in the reliability department.
- Warranty protection. This is one of the most significant advantages of a new car. Suppose a component in your vehicle fails unexpectedly, because the manufacturer’s supplier has failed to provide a quality part. In that case, the manufacturer will always be ready to replace it free of charge.
- Safer to passengers. Stricter safety rules encourage manufacturers to invest in safety every year. By doing so, they seek to innovative engineering solutions that improve vehicle structure and limit harm to passengers in an accident.
New cars undoubtedly have their benefits, but it’s not all rosy. They’re:
- Expensive to buy. More safety systems, more features mean higher prices. For the past several years, new cars have become more expensive. Sometimes, even too expensive.
- Quick depreciation. A new vehicle loses much of its value in the first few years of ownership. By some estimates, the instant loss can be 20% of the car’s value.
- Costlier to insure. The ever-increasing technological arsenal has also driven up the cost of new car insurance. This is especially true for higher-end cars.
To alleviate the quick depreciation issue, I would like to highlight new electric cars:
While electric cars today are an expensive indulgence, after a few years, demand for used electric vehicles will skyrocket, allowing you to sell yours for a much higher price and thus minimize the loss of residual value.
So, what about used cars – yay or nay?
Given the various expenses of new cars, many people choose the less-exciting second-hand route. And certainly, there’s a lot to love, such as:
- Lower prices. By the time a vehicle comes on the used-car market, much of its depreciation has already happened (and been paid for by the prior owner).
- More feedback available. Drivers who have purchased a new vehicle do not pass up the opportunity to share their experiences. Feedback from other drivers might help you avoid making a risky purchase and predict what problems you might have in the future.
- Cheaper to insure. Older cars have probably passed the phase where they were expensive, or additional spare parts were costly. Furthermore, older cars are less likely to be stolen.
While these are the primary benefits of a used car, you may also purchase a certified pre-owned vehicle from a dealer. Certified pre-owned vehicles are typically more expensive than other used vehicles, but they have also been thoroughly inspected and come with a manufacturer’s warranty.
Sounds good, doesn’t it? So, why shouldn’t you go for a used car? Well:
- Worse fuel efficiency. Manufacturers spend millions in order to increase fuel efficiency and reduce emissions. This is especially true for models with petrol or electric motors. Even a five-year-old car cannot match the efficiency of a new one.
- Limited selection. When you buy a used car, you will have to accept the choices in front of you. So if you have specific needs, it may not be easy to find the right car.
- Some parts can be expensive. As a car gets older, the vast majority of components will wear out sooner or later. Replacing a light bulb or a suspension component is not difficult, but various sensors and electronic systems can be expensive, even in a ten-year-old car.
Furthermore, according to experts:
The scarcity of new cars has increased demand for used ones. And as demand goes, so do prices. Still older cars will remain more expensive than new ones.
Used cars may be a better option in 2022 – here’s why
2021 was more than a challenging year for the automotive industry. Almost every known manufacturer in the world had problems with supply chains.
A shortage of semiconductors and other essential parts meant that manufacturers could not fulfill all possible car orders. For example, in Germany, car production was at the lowest level since 1996.
While most manufacturers agree that the situation should stabilize or even improve in 2022, this does not mean that new car buyers will not face difficulties.
New cars will still be equipped with inferior equipment, and deliveries of new cars will still take longer than expected. Finally, there will still be a chance that the salesperson who took your order will call you one day and tell you that your order is canceled. That’s quite a disappointment!
In my opinion, these are the reasons why second-hand cars seem like a more logical and safer investment.
“As you browse the used car market, you will very quickly discover different, exciting, and tempting offers at reasonable prices. For example, a two-year-old vehicle with a manufacturer’s warranty will be about 15 – 25 % less expensive than a brand new one with only the essential equipment. This type of car can be bought and driven instantly, instead of waiting for a new vehicle for an unknown period.”
That’s all great, but which should I go for?
Again, choosing well is all about knowing what’s right for you.
When considering which path to take, don’t jump to urgent conclusions. Instead, compare the available offers and think about the long-term benefits of buying a particular car.
With that said, considering the current situation in the new and used car market, the more logical and rational choice these days seems to be getting a used vehicle with a valid manufacturer’s warranty.
This type of car will be considerably cheaper than a brand new one and at the same time, it will offer all the safety features and the manufacturer’s security blanket, which will help to solve particular problems if it breaks down unexpectedly.
