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The Pros and Cons of Buying a Used Car

Brand new cars look sharp, come loaded with state-of-the-art features for safety, entertainment and comfort and should have zero mechanical problems. The cost, on the other hand, might be too much for many would-be buyers.

That is a big reason why millions of drivers purchase less expensive used vehicles. While the financial logic often makes sense, it is important to understand the pros and cons of buying used before making a decision.

Pros

A car with a for sale sign in the window.
  • Lower cost
    • New cars depreciate rapidly and often lose thousands of dollars in value as soon as they leave the dealership.
    • Used cars offer significantly lower purchase prices compared to new models.
    • Lower purchase prices typically result in lower monthly payments.
    • Buyers benefit from depreciation that has already occurred, which helps maximize overall value.
  • Potential to build credit
      • A used car loan works like any auto loan and can help establish or improve credit.
      • Making consistent, on-time payments contributes to a stronger credit history and a higher credit score.
      • This option can be ideal for first-time buyers or young drivers looking to build credit.
      • Responsible loan management supports long-term financial health.
  • Quality (the good)
      • Certified Pre-Owned (CPO) programs provide added assurance.
      • Many CPO vehicles include extended warranties and multi-year coverage for added peace of mind.
      • Vehicle history reports help buyers identify potential issues and avoid unreliable vehicles.
      • Used vehicles today are more dependable than ever.

Cons

  • Higher interest rates
      • Used car loans often come with higher interest rates compared to new car financing.
      • While the vehicle price is lower, higher rates can increase the total cost of the loan over time.
      • Borrowers with strong credit scores may qualify for better terms, but rates are typically still higher than those for new vehicles.
      • Comparing lenders and loan offers is important to secure the most favorable financing available.
  • Quality (the bad)
      • Used vehicles may have unknown histories, including wear and tear.
      • Mechanical issues, past accidents or incomplete repair records can affect reliability.
      • Expired warranties may leave buyers responsible for unexpected repair costs.
      • Non-certified used cars generally carry more risk than CPO vehicles.
  • Outdated technology and features
      • Older model vehicles may lack modern safety, convenience and connectivity features.
      • Common missing features include backup cameras, Bluetooth, hands-free calling and advanced driver assistance systems.
      • Even fully loaded older models may not meet current technology standards.
      • For some buyers, outdated technology can be a deal breaker.

    • Weighing Your Options

    Whether buying new or used makes sense depends on your budget, financing options, vehicle needs and long-term ownership plans. Cost often weighs the heaviest for most buyers, but taking the time to review all factors can help ensure you choose the option that delivers the most value.

Check out FNB's auto loans

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