New vs. Used Cars:
The Battle Drives Through Glenview
There’s no doubt that the decision to buy an automobile is a weighty one, fueled by a number of different concerns. Some prefer to purchase brand new cars in order to get exactly the car they want and know every second of its history. Others insist on buying pre-owned cars, citing a lower cost in exchange for a car with miles already on it. In reality, the debate between new and used cars is much more complicated than that. This topic deserves a closer look under the hood, with a little help from Joe Bredemann, President of Bredemann Ford and Lexus in Glenview, who sells approximately 800 new and pre-owned cars per month.
One of the most significant (but not well known) facts of car-buying is that there are five different classes of cars: new cars, manufacturer certified pre-owned cars, dealer (non-manufacturer) certified pre-owned cars, used cars with 50 to 100,000 miles, and used cars with over 100,000 miles. Each class has its own set of advantages and disadvantages, and a savvy car buyer must know them in order to purchase the vehicle that best fits their needs. The distinction between new cars and cars with 50,000 miles or more is obvious: a used car will have a much lower purchasing price than a new car, but the owner should expect to spend money on repairs and maintenance shortly after purchase. However, the distinction between new and certified pre-owned cars is much narrower.
Bredemann Ford and Lexus carries manufacturer certified pre-owned cars, and here’s why: “These cars must meet certain manufacturer specified criteria for time in use and mileage, and they also must pass a manufacturer-specified inspection.” Manufacturer certification is the gold standard of car quality. Some dealers try to pass off their own form of certification as manufacturer-quality, but their inspections are rarely as rigorous. All Bredemann pre-owned cars, following manufacturer’s standards, go through 100-point inspections before they are approved for selling. Of the 500 trade-ins per month that Bredemann Ford and Lexus receives, only about 150 meet the requirements for selling. Thanks to these thorough standards of quality, many manufacturer certified pre-owned cars come in a condition similar to new cars. According to Joe Bredemann, customers “are buying a similar car at a lower price, only a little bit closer to needing its next routine maintenance.”
Of course, pre-owned cars come with a slightly discounted price tag, but new cars may come out on top in terms of monthly payments: new cars can usually be financed over a longer period of time than pre-owned cars, lowering the amount owed per month (though not the total price). Because of this, in Joe Bredemann’s experience, new cars can sometimes be more advantageous for customers with a limited cash flow. In addition, he notes that some people just prefer to buy a new car: “They want to own a car that has a clean slate, and that higher price is worth it for them. However, many people would prefer to buy a used car at a lower price, balancing the savings of the purchase price against future repairs.”
Most new cars also have the advantage of longer warranties. Everything from replacement parts to major repairs is covered by the manufacturer. Pre-owned cars will have shorter warranties depending on their age, though often not that much shorter. In addition, many dealers like Bredemann Ford and Lexus provide the option of purchasing an extended warranty, which helps offset the risk of future repairs on a pre-owned car.
In short, the choice between buying a new car or a certified pre-owned car is a complex one. Does the buyer want the peace of mind that comes with owning a car from its first mile, or do they wish to save some money by letting someone else absorb the car’s initial depreciation? Because the condition and reliability of these car types are so similar, it is a debate for which Joe Bredemann asserts “there’s no right or wrong answer,” but that “each individual should probably have an interview with a dealer, preferably one that sells both new and pre-owned cars, to help them decide.”