Should I Buy a Used Car?

Consider these pros and cons to decide if a pre-owned vehicle is right for you.

Warren Clarke | 

Aug 5, 2021 | 7 min read

Updated on June 30, 2026

Capital One

Used cars typically cost less than comparable new models, but pricing isn't the only consideration when deciding whether to buy factory fresh or pre-owned. Factors such as vehicle technology, interest rates, and inventory options are also part of the equation.

There are both advantages and trade-offs when you buy a used vehicle. Here's a look at what to consider when you're determining whether buying pre-owned is a good fit for you. Use the table of contents below to jump ahead.

• Benefits of purchasing a used car
• Is certified pre-owned right for you?
• What to consider before purchasing a used car?
• Purchasing a used car: Points to remember
• Location and seasonal waves affect price
• The bottom line 

Benefits of Purchasing a Used Car

Less value lost to depreciation: The time may come when your journey with your car ends, and you need a new one. At that point, depreciation will diminish the value of your car purchase. It has the greatest impact on new vehicles. A new car can lose up to 20% of its value in the first year due to depreciation. Used cars depreciate at a much slower rate, helping you maintain the value of your investment.

More for your money: Say you're in the market for a midsize SUV with $45,000 to spend. That budget could get you a new model from a mainstream brand, but you may be limited to a lower trim. On the used market, that budget could get you a higher trim with more amenities. By purchasing used, you might even be able to afford stepping up from a mainstream brand to a luxury model that would have been outside your budget if you'd bought new.

Certain secondary costs may be lower: You'll have to pay registration and title fees when buying a car. Some states, such as California, consider the purchase price when calculating car registration. Because used cars cost less than new ones, that may translate into lower registration fees for a used car. You'll also need to insure your vehicle. Insurers consider the value of your vehicle when calculating insurance premiums, so a more affordable used vehicle may net you a lower premium than a costly new one.

Is Certified Pre-Owned (CPO) Right for You?

There is a subset of used cars that may be ideal for some buyers: certified pre-owned (CPO). CPO vehicles sit somewhere between brand-new and standard used cars. They are late-model used cars with low mileage, and you can only get them at authorized franchised dealerships.

CPO Pros

Rigorous vetting: Because they've been owned and driven, standard used cars may have hidden problems that aren't apparent at the time of purchase. CPO vehicles must pass a rigorous multipoint inspection to qualify for the program, which can provide buyers with some peace of mind. The exact nature of the CPO inspection varies by manufacturer and typically includes more than 100 checks. These checks cover mechanical integrity, safety systems, and the car's general appearance.

Factory-backed warranty coverage: Third-party warranties, also known as extended warranties, can protect your used car, but they come with certain risks. The providers may be disreputable, and these plans may have exclusions that leave key components unprotected. True CPO vehicles come with warranties directly backed by the automaker and can be similar to the coverage you get when buying a new car. For example, Hyundai reinstates the full factory comprehensive and powertrain new-car warranty on CPO vehicles. And Kia reinstates the full factory new-car powertrain warranty for CPO cars. 

Attractive perks: Many CPO programs offer appealing perks similar to those available for new-car buyers. For example, benefits such as 24/7 roadside assistance, trip-interruption coverage, and complimentary initial maintenance can be part of the package.

Competitive financing rates and incentives: Standard used-car loans typically command higher interest rates than new-car loans. However, CPO vehicles may be eligible for financing through the automaker's lending arm or banks with which the carmaker has partnered. As a result, qualified buyers seeking a CPO vehicle may be able to secure lower APR interest rates than they typically get in the used-car market. CPO vehicles may also come with cash incentives.

CPO Cons

Steeper price: Because CPO vehicles offer significant benefits compared with standard used cars, they generally command a price premium. That premium goes toward covering the expenses associated with preparing a CPO car for the market, such as inspection and refurbishment. A CPO car may cost roughly 4% to 5% more than an identical uncertified used car.

New-car incentives might close the gap: New cars may come with aggressive incentives such as 0% financing and cash rebates. In some cases, if you do the math, these incentives can significantly shrink the price difference between new and late-model CPO cars, making a new-car purchase more compelling.

Hidden vehicle histories: Many CPO vehicles are off-lease vehicles with just one owner, but some may have started as a dealership's loaner vehicles. Though they may have passed vehicle inspections, they may have been driven by multiple drivers.

Limited inventory: CPO cars must meet eligibility requirements, so there are fewer of them on the market than standard used cars. Those limitations could make it difficult for you to find the trim or color you want.

What to Consider Before Purchasing a Used Car

When a car is not a certified pre-owned vehicle, there are things to consider before buying used.

Know the importance of vehicle condition: There's a wild card when buying a used car: vehicle condition. Some car owners are meticulous with maintenance, but that's not true of everyone, which may result in higher repair costs down the line. If your pre-owned vehicle's new-car warranty has expired, you're at risk of an unexpected repair bill if a part fails. The solution may lie with an extended warranty, which can provide some protection.

Keep technology in mind: Automotive technology is always evolving. Safety tech can help prevent accidents, and newer vehicles are more likely to offer a wider range of these features than older standard used cars. The same is true for connectivity tech. Innovations like integrated Wi-Fi hot spots and Apple CarPlay and Android Auto connectivity are relatively recent and may not be offered on older models.

You may have to compromise on trims, colors, and options: New-car buyers can configure their purchase online and get a custom build from the factory. With a used car, limited local inventory may prevent you from finding a vehicle with the exact color, trim, and options you want. Having a flexible approach to this is important.

Purchasing a Used Car: Points to Remember

No used-car shopper wants to wind up with a lemon. There are two steps you can take to reduce the risk of that happening:

1. Run a vehicle history report on your purchase. That report will provide background on the vehicle and let you know if it's had accidents, salvage, or flood titles.

2. Hire a mechanic to inspect the vehicle before you buy. That inspection will provide an additional line of defense in helping you weed out cars that could develop problems later on.

Location and Seasonal Inventory Waves Affect Price

Location affects used-car valuation, and a car's value may change depending on the part of the country where it's being sold. Certain vehicle types are more popular in certain regions, which affects pricing. For example, a used truck might fetch a higher price in a rural area than in the city.

If you want to get the best price, know that there are certain times of the year when dealers may be more motivated to negotiate on used-car prices. They could be looking to hit sales goals at the end of a calendar month, quarter, or year, and that might create bargains. Prices may also be lower during sales events, which often coincide with holidays such as Thanksgiving or Memorial Day.

The Bottom Line

If your primary goal is to save money on your car purchase, a used car will likely be your best bet. You may even find you can get a nicer vehicle than you could have if you'd bought new. However, a new car may be a better solution for drivers who want the most current technology and maximum warranty coverage. If you want a newer car with some warranty coverage, a used car that's part of a CPO program could be just the ticket.

There's a wide scale of used cars available on the market. You can mitigate risks of buying a used vehicle by selecting a car with a clean VIN report, evaluating its maintenance records, and getting it inspected by a professio

Warren Clarke

Warren Clarke is an automotive journalist who specializes in vehicle reviews and consumer advice, and he loves helping car buyers make informed decisions. In addition to Capital One Auto Navigator, he's written for outlets such as Credit Karma, J.D Power, U.S. News and World Report, and Car and Driver.