Now you have got some cash in your hand and you definitely need a car, but there is a question keeps in mind, is it better to buy a new car or a used car? There are a big different between buying a new car and buying a used car. Generally there are three main things to consider which are the car price, car insurance, and car loan. Other than that, some other issues to consider are what the purpose of the car and who is going to use the car? Here we give you some advice and guide to this question.

Always keep in mind that by the moment you drive a new car out off the lot, the car at least depreciate 20% of its market value. Take the brand new 2010 Subaru Outback with the base price of $25,221. It depreciates around $4,138 for the first year from the moment the car drive out off its lot. It depreciate another $2,690 in the second year, and another $2,367 in the third year and the car value become $16,026 in just three years time.

So ask yourself, is your money enough to cover the depreciation? If yes, you can buy any new car you want or else used cars is one of the best choices for you. Why pay more? There is a smarter choice where you can save a lot of money with some useful used car buying tips.

Why buy used cars? Let’s take the same Subaru to continue the calculation. The Subaru depreciates $1,800 in year four and another $1,800 in year five. If you buy it brand new and drive it for 2 years it will cost you $6,828 in depreciation but if you buy a 3-year old Subaru it will only cost $3,600 to drive it for two years.

If you have enough cash in your hand, you love new car smell, you are car enthusiasts who make over million dollars a year and like to collect many cars like Jay Leno’s car collection, you should choose to buy new car. On the other hand, if you are not tight on budget and you know nothing about used cars, new cars may be the best choice for you. You will need to do more research on new car rebates, new car discount, car insurance price, car loan rate to get the best deal if you are plan to buy a car new. In conclusion, buy a new car or a used car is more or less depends on your needs as well as your budget.