Buying a Used Vs. New Car: Which Should You Choose?

Finding the smartest buys on used and new vehicles

iSeeCars.com analyzed over 7 million new and used cars sold from August 2018 to January 2019, comparing the prices of new cars to lightly used cars. It identified the top ten used cars that have the greatest price differences from the new versions of the same vehicle and the new cars that have the lowest price differences from their one-year-old versions. 

“While purchasing a brand new car offers peace of mind, waiting a year and purchasing the same vehicle lightly used from a used car dealer can amount to significant savings,” said Phong Ly, iSeeCars.com CEO. “Along with conducting a VIN check and obtaining a vehicle history report such as a Carfax, consumers should have the car inspected by an independent mechanic prior to purchasing to ease any uncertainties about the vehicle’s condition and driving history of the last car owner.”

Cars to Buy Used

Why Buy a Used Car?

Insurance companies further add to the case for buying a used vehicle. “Most one-year-old cars also have lower auto insurance costs than new vehicles, which further adds to savings.” 

Top Cars to Buy Used Vs. New

The list of cars that have the greatest change in price between their gently used and new versions includes a mix of vehicles: six cars, three SUVs, and one minivan. 

The car with the largest price difference between its new and gently used version is the Ford Expedition full-size SUV at 38.5 percent, or $24,690. “The Ford Expedition has the highest starting price in its class, even costing more than some of its comparable luxury versions,” said Ly. “In order for it to appeal to used car buyers, its price has to come down significantly.” 

Ranked second is the Kia Sedona minivan, which has a 37.8 percent difference between its new and lightly used versions. “The Kia Sedona ranks below its competitors in terms of family-friendly features such as cargo space, entertainment and safety technology, so it may be less desirable on the used car market,” said Ly. 

A pair of Infinitis make the list, including the fourth-ranked QX80 full size SUV and the Q50 compact car. “The QX80’s high average starting price of $75,000 coupled with being one of the lower-rated vehicles in its class contributes to its large price reduction,” said Ly. “Similarly, the Q50 does not stack up against its competition in the luxury small sedan class, lowering its demand in the used car marketplace.” 

Five non-luxury passenger cars make the list: the third-ranked Chevrolet Impala, the fifth-ranked Ford Fusion Hybrid, the seventh-ranked Nissan Altima, the ninth-ranked Kia Optima and the tenth-ranked Hyundai Accent. “The demand for passenger cars is shrinking, as we have seen with the recent discontinuation of many sedans including the Impala and the Fusion Hybrid,” said Ly. “These cars are not among the top rated vehicles in their class, which explains their steep price differences between new and used.” 

Rounding out the list is the eighth-ranked Hyundai Santa Fe Sport midsize SUV, the five-seater version of the seven-seat Santa Fe. “The Santa Fe Sport does not stack up to its stiff competition in this vehicle class, resulting in a major price reduction to its starting price that’s already on the lower end of the vehicle segment,” said Ly.

Best SUVs to Buy Used  

Joining the three SUVs on the overall list are seven SUVs in varied sizes--three compact, two midsize, and two full-size.  

The three compact SUVs include the fourth-ranked Kia Sportage, the sixth-ranked Nissan Rogue, and the tenth-ranked Mitsubishi Outlander. “While the Kia Sportage is near the head of its class in terms of ratings, it lags behind its rivals for cargo space and handling,” said Ly. “The Nissan Rogue and Mitsubishi Outlander are on the lower end of rankings in this competitive segment, which explains why the used versions are priced to sell.” 

The midsize SUVs include the eighth-ranked Nissan Pathfinder and the ninth-ranked Kia Sorento. “Like the Nissan Rogue, the Pathfinder is on the lower end of rankings for its class,” said Ly. “Similarly, the Kia Sorento has the same cargo space issues as the Sportage, making it a less-than-ideal option for a family vehicle that requires significant cargo space.” 

Rounding out the SUV list are the full-size Nissan Armada, ranked fifth, and the GMC Yukon XL, ranked seventh. “The Nissan Armada is the non-luxury version of the second-ranked Infiniti QX80 and achieves rankings on the lower end of its class,” said Ly. “The GMC Yukon also achieves low rankings, resulting in both having significant cost reductions off the expensive starting prices characteristic of full-size SUVs.” 

Best Trucks to Buy Used 

The three pickup trucks with the biggest price difference between their new and lightly used versions are the top-ranked Ram Pickup 1500, the second-ranked GMC Sierra 1500, and the third-ranked Nissan Titan. “These three pickups are all full-size,” noted Ly. “Just like full-size SUVs, they require a larger reduction from their higher starting price to attract used car buyers.” 

Best Luxury Cars to Buy Used

“Luxury vehicles are often leased due to their high starting prices, so dealers have to significantly reduce the prices to attract used car buyers,” said Ly. 

The list is evenly split between SUVs and cars. Additional SUVs not appearing on the overall or SUV lists include the seventh-ranked Audi Q5 compact and the tenth-ranked Cadillac XT5 midsize. “The Audi Q5 is among the priciest vehicles in its class, which could contribute to its steep reduction,” said Ly. “Conversely, the Cadillac XT5 has one of the lowest base prices in its class, but does not stand out among other vehicles in its competitive class.” 

Additional cars making the list include the third-ranked Audi A4 compact car, the BMW 4 Series compact car, the eighth-ranked Mercedes-Benz C-Class compact car, and the Mercedes-Benz E-Class midsize car. “The high starting price of these vehicles coupled with the lower demand for passenger cars in favor of SUVs leads to significant price decreases,” said Ly.

Best Hybrid and Electric Cars to Buy Used

Five vehicles have a price difference larger than the overall 28.1 percentage for the segment. 

The eco-friendly vehicle with the greatest price decrease after a year is the Nissan LEAF, the only fully electric car on the list, which has a 40 percent cost difference between its new and lightly used models. “Although the LEAF is the among the more popular electric vehicles in the country, EV adoption is not widespread so there is not a high demand for used versions of these vehicles,” said Ly.

Two Ford Fusions make the list including the second-ranked Ford Fusion Hybrid and the fourth-ranked Ford Fusion Energi plug-in hybrid. “Both these cars were recently discontinued, which shows that they are not in high demand,” said Ly. 

Ranked third is the Kia Optima Plug-In Hybrid, and its non plug-in variant, the Kia Optima Hybrid ranks fifth. “The Kia Optima hybrids lag behind other hybrids in terms of fuel economy, which coupled with the low demand for midsize sedans likely contributes to their steep price drop,” noted Ly. 

Best Sports Cars to Buy Used

The sports car with the largest price difference as a percentage of its total cost is the FIAT 124 Spider, which has a 25.5 percent cost reduction amounting to $7,678 off its average starting price of $30,062. “FIATs are generally less popular than other brands, so it's no surprise that it's on the top of this list,” said Ly.

New Cars to Buy Over Used

“Instead of buying a car that’s already been driven for one year, consumers can buy the new version of select vehicles with a purchase price of just a few thousand dollars more to avoid the uncertainties that come with purchasing a used vehicle,” said iSeeCars CEO Phong Ly.  “When spread out over the length of the average car loan at 5.5 years, the slightly higher monthly payment can be offset by the car warranty and dealer incentives such as rebates.” 

Why Buy a New Car?

Best Cars to Buy New Vs. Used

The list of cars that have the smallest change in price between their new and gently used versions is dominated by SUVs, which comprise seven of the top 10 models. “SUVs have eclipsed sedans as the most popular vehicle type, so it is no surprise that their surge in popularity has resulted in a below-average price difference between new and gently used versions,” explained Ly.

Subcompact SUVs comprise the top three vehicles on the list. The Honda HR-V takes the top spot with a 10.5 percent cost difference, followed by the second-ranked BMW X1 with a 11.7 percent difference, and the Subaru Crosstrek with a 12.2 percent difference. “Subcompacts are a rapidly growing segment because they strike the right balance of cargo room and other SUV perks while maintaining a price tag that is comparable to sedans,” said Ly. “Each are among the top models in their class, the HR-V and Crosstrek for non-luxury and the X1 for luxury, and the demand could be driving up prices for lightly used versions of these subcompact SUVs.” 

To further demonstrate the popularity of small SUVs, three compact SUVs make the list including the fourth-ranked Honda CR-V, the eighth-ranked Mazda CX-5, and the ninth-ranked Porsche Macan. “Both the CR-V and the CX-5  have high reliability and value ratings,” said Ly. “The lowest-cost model in the Porsche lineup, the Macan was a Kelley Blue Book Resale Award winner in 2017 and 2018 and appeals to luxury buyers who want this desirable name badge.”

The Toyota Tacoma ranks fifth, losing only 12.3 percent of its value when compared to its new version. “The Toyota Tacoma is known for its reliability and durability, and because of the high demand for lightly-used pickups, it maintains most of its value in the used car marketplace,” said Ly.

A pair of compact sedans, the sixth-ranked Honda Civic and the tenth-ranked Subaru Impreza, account for the only sedans on the list. “While the sedan segment as a whole is declining, this shows that there is still some demand for compact sedans,” said Ly. “The prices of compact cars rose in 2018 after years of declines due to rising gas prices and heightened demand from buyers looking for more affordable vehicles.” 

Rounding out the list is the seventh-ranked Honda Pilot midsize SUV. “The Honda Pilot is known for its reliability and is among the more affordable third-row SUVs available,” said Ly. “The demand is high for this practical and dependable family vehicle.” 

Best SUVs to Buy New Over Used

Joining the seven SUVs on the overall list are eight SUVs in varied sizes to include three midsize, three compact, and two subcompact.  

The three additional midsize SUVs join the fifth-ranked Honda Pilot including the tenth-ranked Chevrolet Traverse, the twelfth-ranked Toyota Highlander, and the fourteenth-ranked Toyota 4Runner. “The Traverse and the Highlander are popular and reliable family crossovers that are competitively priced for the segment,” said Ly. “The 4Runner is built on a truck platform and is known for its ruggedness and durability, which could explain why a lightly used version maintains most of its value.”

In addition to the compact SUVs on the overall list, are two additional compact SUVs: the ninth-ranked Subaru Forester, the thirteenth-tanked GMC Terrain, and the fifteenth-ranked Subaru Outback. “Both the Subaru Forester and the GMC Terrain earn high reliability and safety ratings which contributes to their high demand in the used car marketplace,” said Ly. “Technically a crossover wagon, the Subaru Outback has a niche following of consumers who want a rugged crossover with the cargo space of an SUV that handles like a car.” 

The two subcompact SUVs include the eighth-ranked Nissan Rogue Sport and the eleventh-ranked Buick Encore. “Nissan introduced the subcompact Rogue Sport in 2017 to capitalize on the success of the compact Rogue and appeal to consumers who want a sporty and spacious vehicle with car-like dimensions,” said Ly. “The Buick Encore is among the top vehicles in its class in terms of quality and popularity and has resonated with consumers by offering style and sophistication with an average new starting price of $24,077.” 

“Noticeably absent from the list are full-size SUVs, which typically have higher starting prices and likely have to come down a lot in price to attract used car buyers,” said Ly.

Best Trucks to Buy New

The third-ranked Toyota Tundra joins the top-ranked Tacoma as the second Toyota pickup to have a below-average cost difference. “Toyota pickups are known for being indestructible, which contribute to their value retention,” said Ly. “Additionally, Toyota is not a major fleet seller, so there are not as many in the used marketplace compared to fleet sellers like Ford, heightening demand.” 

A pair of Chevrolet trucks have a cost difference below the 24.4 percent average for the segment: the second-ranked Colorado and the sixth-ranked Silverado 1500. “The Colorado has been named as the most fuel-efficient pickup, which helps set it apart from its competitors,” said Ly. “The Silverado 1500 is known for its technological features in addition to its durability, which helps contribute to a lower-than-average price reduction on its one-year-old models.” 

Ranked fourth is the Nissan Frontier, which has a 17.2 percent cost difference. “A new Frontier has the lowest starting price of its competition at $27,307, and its ability to attract more practical pickup buyers has helped it steadily grow in popularity in recent years,” said Ly.

The Ford F-150 ranks fifth and rounds out the list of trucks that consumers should consider buying new instead of lightly used. “The Ford F-150 is the top-selling pickup, which means that its high demand results in its  high value retention,” said Ly. “The F-150 joins the Tundra as the only two full-size pickup trucks with a below-average price difference between their new and lightly-used models.”

Rounding out the list are the seventh-ranked Nissan Titan, the eighth-ranked GMC Sierra 1500, and the ninth-ranked Ram Pickup 1500. “The three pickups that have above-average price increases between their new and its lightly used models are all full-size,” noted Ly. “Just like full-size SUVs, they require a larger reduction from their higher starting price to attract used car buyers.” 

Cars to Buy Used and New By City

Best Car to Buy Used by City

The model with the largest relative price difference across the most cities is the Hyundai Santa Fe Sport, which is the top model to buy used in four cities.

Best Car to Buy New By City

The model with the lowest price difference across the most cities is the Honda Civic, which appears in four cities.

Best Cities to Buy Used Cars

iSeeCars also looked at the top 100 metropolitan areas to identify the top 20 cities with the largest price differences between new and lightly used vehicles. These are the cities that provide the best savings opportunities on used cars.

When deciding between a new and a lightly-used version of the same vehicle, consumers should look at the cost difference to decide which is the smarter purchasing decision. “While buying used always amounts in cost savings compared to the new sticker price, some used models only offer minimal savings on the car payment that are often offset by warranty coverage and other incentives such as free roadside assistance,” said Ly. “It’s important to understand that it is a good financial decision to purchase some models new, while there are some that should be purchased used.” 

Methodology

iSeeCars.com analyzed over 7 million cars sold between August 2018 and January 2019.  New cars included in the analysis were from model years 2018 and 2019, while lightly used cars were defined as used vehicles from model years 2017 and 2018. Low-volume models were excluded from the analysis, as were cars with outlier mileages.  The average asking prices of the lightly used cars were compared to those of new cars from the same model. The difference in price for each car was expressed as a percentage of the new average prices.

About iSeeCars.com

iSeeCars.com is an online car search engine that helps consumers find the best car deals by providing key insights and valuable resources, like the iSeeCars VIN report. iSeeCars.com has saved users over $174 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of cars and thousands of car dealerships. Based in the Boston area, iSeeCars.com was founded by former TripAdvisor and SAP executives determined to improve the car shopping experience for consumers.