The 30-Second Verdict
New cars lose roughly 20% of their value in the first year. Buy 2–3 years old with low miles: someone else ate the depreciation, you get modern reliability. New only wins twice — killer financing (0% APR) that beats the used discount, or you keep cars 10+ years (then the per-year cost converges).
Why 2–3 Years Old Is the Sweet Spot
Year-one depreciation is the steepest cliff in car ownership — often $6,000–$8,000 on a $35,000 car. By year 3 the curve flattens. A 3-year-old car with 30,000 miles has about 80% of its life left at roughly 65% of the price. That’s the deal.
When New Actually Wins
- 0% financing: a 0% new loan versus an 8% used loan can erase the depreciation gap.
- You keep cars forever: drive it 12 years and new-vs-used barely differs per year.
- Peace-of-mind premium: full warranty, known history — worth something, just know the price.
The Bottom Line
Default to 2–3 years old. Go new only if the financing math or your keep-forever habit says so.
The New vs Used Calculator
Educational estimate only. Assumes 60-month loans for both. Based on YOUR prices, APRs, down payment, years you’ll keep car you enter. Ignores taxes, fees, insurance, maintenance, reliability, and resale. Verify APR with lender today. Not financial advice.
Disclaimer: Educational only, not financial advice. Talk to a qualified financial advisor about your situation.
Frequently Asked Questions
What is the depreciation rule?
New cars lose roughly 20% of their value in the first year. Buy 2–3 years old with low miles — someone else ate the depreciation, you get modern reliability.
When does buying new win?
Only twice: killer financing like 0% APR that beats the used discount, or you keep cars 10+ years — then the per-year cost converges.
Why is 2–3 years old the sweet spot?
Year-one depreciation is the steepest — often $6,000–$8,000 on a $35,000 car. A 3-year-old car with 30,000 miles has about 80% of its life left at roughly 65% of the price.
When should I ignore this rule and talk to a professional?
The calculator ignores taxes, fees, insurance, maintenance, and resale — talk to a qualified financial advisor about your situation.
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