The advantages of new and used cars.

Buy new or used? With a saturated market of used cars, fueled by rebates and special dealer incentives, used-car shoppers have lots of choices these days. If you’re in the market for a used car, you’ll be pleased with the lower prices, but if a new car is your dream-come-true, trading in your old automobile may not bring as much money to the table.

First, a buyer needs to know how much vehicle he or she can afford, as well as what characteristics are required from a vehicle before it can be considered. If you're on a strict budget, buying used allows you more vehicle for less cost. For less than half the price of the average new car, you can buy a slightly-used, larger vehicle with more features. However, buying a used vehicle is risky, because you are buying a vehicle that someone else has owned and driven. You don't know its maintenance and driving history, and repairs won’t likely be covered by a warranty.

The Case for Buying New
For some, buying used isn't an option; they want a brand new car. They want to select the color and all of the features. There's a pride of ownership and peace of mind in being a vehicle's first owner. Some new car advantages include:

• Reduced maintenance: A new vehicle won't need maintenance for the first several thousand miles, and then only an oil change and tuneup are required. The new vehicle likely won't need new tires, a battery, exhaust system or brakes during the first few years of ownership or longer.
• Warranty coverage: The manufacturer covers its new vehicles under warranty for at least three years, and some warranties last even longer. Many luxury makes now offer warranties of four years and 50,000+ miles. In addition a comprehensive warranty, some automakers provide coverage for both corrosion resistance and the powertrain.
• Peace of mind: If you encounter problems with your new car, you have legal recourse through state lemon laws — offered in all 50 states. If you can prove that your new car is a lemon, you could receive a replacement vehicle or get your money back. Lemon laws apply only to new cars.
• Roadside assistance: Almost all new cars and light trucks come with free roadside assistance while the vehicle remains under warranty, and, in some cases beyond. In addition, some automakers reimburse you or provide alternate transportation if you get stranded far from home.

The Case for Buying Used
If you're not married to the idea of buying a new car, used vehicles have their own benefits:

• Increased choice: The used automobile market has been booming in recent years. The used-car market set a new record of 43.5 million sales in 2003, according to CNW Marketing Research. The result is a vast choice in used cars and attractive prices.
• Improving reliability: Although used vehicles typically don't carry the same warranties as new ones, the original factory warranty on a new car is transferable to a second owner, usually at no charge. Buyers of certified pre-owned cars from an authorized dealer can purchase a late-model used car with the original warranty and then choose to add to it.
• Just like new: Today, most manufacturers have instituted certified pre-owned (CPO) programs. Sales of CPO cars have increased from 452,829 in 1997 to 1,375,000 in 2004, according to CNW.

Source: Michelle Krebs, cars.com