← Guides · November 12, 2026
New vs Used Car: Which Costs Less to Own?
“Buy used, let someone else take the depreciation hit” is common advice. It is often right, but it is not automatic. Used cars tend to cost more to maintain, and the answer depends on the specific cars. Here is how to compare them.
What changes between new and used
- Depreciation: a new car usually loses more dollars in the first years. A used car has already taken part of that hit.
- Maintenance: a new car is often under warranty for a time. An older one tends to need more repairs.
- Financing: loans for used cars often have higher rates, though not always.
- Insurance and fuel: these depend on the model, not mainly on the age.
A worked example
Both cars are paid in cash and kept 5 years, driven 12,000 miles per year at 30 mpg with $3.50 fuel, insurance of $1,800 and fees of $300 per year.
New car: $30,000, resale $15,000 (50%), maintenance $900 per year. Used car: $20,000 (a 3-year-old version), resale $11,000 (55%), maintenance $1,300 per year because it is older.
| New | Used | |
|---|---|---|
| Depreciation | $15,000 | $9,000 |
| Fuel | $7,000 | $7,000 |
| Insurance | $9,000 | $9,000 |
| Maintenance | $4,500 | $6,500 |
| Fees | $1,500 | $1,500 |
| Total (5 years) | $37,000 | $33,000 |
| Per month | $617 | $550 |
The used car saves about $4,000 over 5 years, even after allowing $2,000 more in upkeep. But the gap is small enough that one big repair on the used car could erase it.
What really decides it
- The specific cars, not new versus used in general.
- Repair risk: check the model’s reliability record and get a pre-purchase inspection on a used car.
- Your tolerance for surprises. A warranty has a value, even if it is hard to price.
- How long you keep it. See how long to keep a car.
Run both cars in the calculator with your own prices, and read how depreciation works to choose resale values.
Numbers are illustrative. Prices, warranties and repair costs vary. This is general information, not financial advice.
More guides
- Car Depreciation Explained: How Much Value You Lose and How to Estimate It
- Car Maintenance and Insurance Budget: What to Set Aside Each Year
- Cost Per Mile of Driving: How to Calculate It and What to Do With It
- Financing vs Paying Cash for a Car: What the Interest Really Costs
- Fuel Cost and MPG: How Much Does Fuel Economy Really Save?
Written by the Wheelwise editorial team. Figures are illustrative and rules change, so check official sources. See how we write and update guides on the About.