Are Brand New Cars A Waste Of Money?

Some think it’s an investment, while some see it as a debt trap. In this blog post, we are going down to the bottom of the question – are brand new cars a waste of money?

You’ve seen it on television, in movies, and on social media. Movie and TV show portrayals of characters driving that shiny new car with swag. Meanwhile, we have social media influencers flaunting their new ride accompanied by a motivational success caption and #blessed. With all these things we see around us, it is no surprise that most people would dream of having that brand new car of their own. According to the Good Car Bad Car website, more than 17 million vehicles were sold in the US last year.

17 million vehicles sold last year – that’s a huge number, isn’t it? But, the truth is, it really isn’t for those who live and breathe cars. According to the same website, the number of vehicles sold for 2019 is lesser than those of the previous years. In 2018, there were 17,274,250 units sold in the US, compared to 17,023,289 units in 2019. Though it may look like it only has a slight difference, it’s already a deep plunge in the automotive industry as it means millions of dollars lost. Market analysts consider a lot of factors why people are not buying new vehicles that much last year. Is it because people were already choosing used cars? Probably. But, as of now, we don’t have a definite answer.

So are brand new cars a waste of money? This post doesn’t intend to diss or discourage anyone who wants to purchase a well-scented new vehicle. Truth be told, without people buying new cars, used car dealerships won’t have a business to begin with. This post intends to answer – to the best of our knowledge – the titular question many people ask. This post also weighs the advantages and disadvantages of buying brand new cars and giving some tips if you ever decide that you should.

If you’re planning to buy a car and still on the fence whether to go for brand new or visit a used car dealership instead, then this article is for you.


Are Brand New Cars An Investment? The Advantages

Buying a brand new car gives that feeling of success to most people. There is that sense of fulfillment people feel as they smell the scent of never-been-touched interiors and rev up the engine for the first time. Emotional aspect aside, here are some of the advantages that would make you say, “Are brand new cars a waste of money? Definitely not!”

Newer Features

Newer cars have better features most of the time. The thing is, automotive technology gets outdated fast; what may be awesome today will be obsolete in just a few years. Buying a 2018 model may have, more or less, updated features that would make its predecessors blush. Another thing to consider is the vehicle’s safety feature—the newer the model, the better the safety features. If a more updated technology is something you’re very particular of, then spending money on a new vehicle may be the best option for you.

Easy To Acquire

Contrary to popular belief, it’s much easier to get a brand new car than to buy a used vehicle. This belief springs from the idea that everything new is expensive. More often than not, that’s not the case with new cars. Some car manufacturers offer promotional and even discounted pre-order rates whenever they launch their brand new vehicles. Not only that, car dealers are going to be more forgiving when they’re trying to push newer models off of their parking lot. Though most times the price of newer cars may still be slightly higher than used ones, it’s proven that the purchasing experience will be less stressful. But still, haggling is not an option.

Customize The Car The Way You Want

With used cars, what you see is what you get. There are times when used cars may look shiny on the outside but are rotten on the inside. This case mostly happens when you buy from an authorized dealer or a shady private seller. But when you choose to purchase a new vehicle, you can customize it like your favorite Subway sandwich. First off, you can select the body and the color, then you can add the additional features you want, such as rear spoiler, sunroof, and cruise control, to name a few. To make it short, with newer cars, what you want is what you get.

It Comes With Better Warranty

One of the best advantages of buying brand new cars is that it comes with full warranty coverage. Used ones do have a warranty, but it has already been used, so its warranty’s life may depend upon transfer. And most likely, you will need to buy an extended service plan, which can be a bit costly. But with brand new cars, the manufacturer’s warranty isn’t just full, but it’s also the cheapest warranty you’ll ever have.

Above All Reasons, It’s Spanking New!

Of course, but there’s more to a brand new car than just bragging rights. Buying a new car means you will be the first one to drive it around. Besides that, you know that the vehicle doesn’t have any mechanical problems that may lead to severe accidents. Yes, the allure of a new car is there, but that’s just the superficial aspect of it.


Why Are Brand New Cars A Waste Of Money? The Disadvantages

So why are brand new cars a waste of money? There are only three main reasons (brand new car lovers can breathe now). However, these three reasons factor in a person’s monetary status and lifestyle, so they still have a long-lasting impact. So if you’re planning to buy a new car, you should really know these disadvantages.

It May Not Be A Liability Sometimes, But It’s Never An Asset

Buying a brand new car means shelling out a huge pile of cash. And when we say huge, we mean TREMENDOUS. And the more you own your new vehicle, the more money you have to take out of your wallet. You also need to set aside a budget for the gas and other maintenance expenses. Remember that regular tire updates can cost up to $15,000 a year per car. And that’s just for one year. And even if you buy a new vehicle for business purposes, you’re still up for a loss anytime soon from maintenance alone.

Depreciation Goes Down Faster Than You Can Bring It Home

Yes, you may have heard of this before. If you’ve talked to a friend or a relative about buying a car, chances are they already told you about this. For those who have no idea, it’s the understanding that the vehicle depreciates at up to 20% rate the minute start your new car’s engine. This may sound like a cliche already, but it doesn’t mean that it isn’t true. To keep its value and put the depreciation rate at bay, you must maintain the car at its most optimal state, which means you have to spend more.

Negative Equity Will Haunt You Until…

… You paid your car off. But that’s only when you intend to keep your vehicle until you finished paying for it. If that’s the case, then there’s no problem with it. However, when you plan to trade in your vehicle in the next two to three years, then that’s where the negative equity would impact your finances. How? The equity will spike the price of your next car.

So if the car dealership agrees to trade-in your vehicle for $15,000, which has an original cost of $17,000, then the extra $2,000 won’t disappear. That difference will be added to the next vehicle you’re buying. So, if you’re planning to buy a $20,000 car, expect the value to become $22,000. And that doesn’t even include other financing expenses.

driver and buyer on a test drive

Are Brand New Cars A Waste Of Money? Might Not Be When You Follow These Purchasing Tips

In a very modest way, brand new cars can be an investment. For example, you can sell your brand new car when you need a considerable amount of money for an emergency. But that’s quite about it.

That being said, brand new cars are not a waste of money if you only know how to play your cards right and not fall into a deep financial mess. If you’re really eyeing to buy that brand new car you’ve been dreaming of, here are some essential tips that you should follow.

Make Sure You Won’t Have Financial Difficulties After The Purchase

But how? First off – and this is quite obvious – you should know what you can afford. Make sure that the car you want still fits your resources. Determine how much you’re willing to spend for a brand new car, and don’t go over that number. It is tempting, sure, but don’t give in. When the asking price exceeds your budget in mind, have the willpower to walk away and look for another.

If you’re thinking about getting a car through financing, make sure you get pre-approved for a loan first. Also, make sure you do this before making the big purchase. Not all financing offered by dealerships is exceptional. Getting pre-approved helps you determine and compare interest rates so you’d know which loan offer will suit your budget.

Common mistakes car buyers make is that they always tend to rush the purchase and not knowing the fees that should be taken care of. And this is true, especially to those who are buying a car for the first time. There’s a rule of thumb when it comes to purchasing new vehicles. Your car expenses should be below 25% of your monthly budget; the lower, the better. Car expenses should include gas expenses, insurance, and other car maintenance.

Know What You Want

Now that you’ve secured your finances, it’s time to know what kind of brand new car you should buy. Most car buyers know how exhausting it is to buy a vehicle. It’s not like buying a shirt where you can just wear one, take it off, and wear the next one. Buying a car takes hours to check only one car. Imagine if you have to check a dozen.

To cut the time short, research beforehand on what vehicles you want to check. Also, check for the availability of the cars in the dealerships you’re planning to visit. By making a list ahead, you would be able to cut the checking time in half. You may not save money on this one, but at least you’re saving your time.

Aside from the types of vehicles you want to check, it’s also essential to list down the features you want to have. Do you want to have an upgraded infotainment system? How about a sunroof? Would you like to drive comfortably with warm, heated seats? Whatever you want, it’s all up to you. By knowing the right features you want to have, you’d be able to exclude the ones you don’t want. This way can save you money in the process.

Below is a list of some of the vehicle features you might want to include in your must-haves list.

Safety Features

Most car manufacturers are very laser-focused on keeping safety features better for each release. Be sure to look out for features such as back-up cameras, traction control, and airbags.


When buying a car, you also have to double-check its performance. Start with the type of engine the vehicle has. Then check the horsepower, then the fuel mileage, transmission, and other engine-related features.

Convenience Features

Just because you’re checking doesn’t mean you have to sacrifice comfort. Convenience features you should look out for include power mirrors, charger outlets, power windows, and even cup holders.


They may all look the same, but car seats have different kinds. You can start off with how many passenger seats do you want to have. Then you can choose if you want leather seats, if you’re going to have heating seats, or if you prefer electronic or manual adjustments. Also, don’t forget about the armrests.


You have to think about storage, especially when you carry many things with your car day by day. Check the cargo capacities and how many storage areas the vehicle has.

Infotainment System

Last but not least, you want to be entertained while on the. Infotainment systems include touch screens, Wi-Fi, navigational system, Bluetooth, and USB ports.

Ask For A Test Drive

At this point, you’ve already chosen the right vehicle and the right features you want to come along with it. The next thing you would do is to give the car a spin around the block.

When it comes to checking a vehicle, there’s nothing better than trying it out yourself. So don’t be afraid to ask the salesperson to have a test drive and let them demonstrate the features for you.

Before you take that keys and drive it off for a test, ask the salesperson to give you a feature demo on the vehicle’s parts and services. When you’re convinced enough of the features presented to you, it’s time to give it a test drive. Don’t forget to bring the sales staff with you.

What To Do When Doing A Test Drive?

When you take it for a test drive, don’t just go drive straight for a mile and then go back. Take it for a little adventure and try to use all the features of the vehicle. While driving, carefully use all the features and turn left or right at some point. Also, drive it on the highway then take it on a busy city street with a lot of traffic to check the fuel economy. Lastly, take note of the experience. Did you feel comfortable driving it? Are the features beneficial for you? Was it a good drive overall? With the experience you’ve had, you’d be able to assess if it’s the right vehicle for you or if you need to test another one.

Negotiate For A Better Price

Lastly, when all is said and done, it’s time to negotiate for a better price.

Yes, car dealerships depend on customers buying vehicles while the sales team relies on their commission. However, they also need to build rapport with the buyers by providing a great offer and better financial assistance. Ensure you communicate what you want clearly and fairly so you and the salesperson can settle at a fair price. If you can’t be on the same page, then the salesperson would be happy to look for the next best offer for you.

Are Brand New Cars A Waste Of Money? The Conclusion

It’s not, but only if money isn’t an issue. And we mean it in a good way. Buying a vehicle will put a financial burden on you if you’re not well-prepared. But again, if it isn’t an issue, then you always have the choice to buy a brand new car or not. Otherwise, you can check out used vehicles instead.

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