Is It Ever Worth It To Buy a Brand New Car?

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New car envy. We’ve all been there. We see an acquaintance roll up in their brand new Lexus/BMW/Audi, and we become envious. We drool over their heated leather seats, sunroof, and navigation system, and all of a sudden our five year old car starts to look beat up and dingy. I don’t know anyone who hasn’t been there.

Unfortunately, when we succumb to new car envy, it’s often another way we’re trying to keep up with the Joneses, and that feeling can quickly land us in debt with a deprecating asset, which is never a wise idea.

But I get it. Sometimes you really do need a new car. If you’re driving a 20-year-old beater on its last legs with repair costs that are worth more than the vehicle itself, you probably need a new car. Or if your car has stopped being reliable in helping you get from home to your job, you probably need a new car. But while you may need a new-to-you car, what you probably don’t need is a brand new car, and that’s what the point of this post is about.

Is It Ever Worth It To Buy a Brand New Car?


Is it ever worth it to buy a brand new car? I’d offer a resounding “No,” because there are so many other ways you could allocate your cash to serve you better. The thousands of dollars you save by simply forgoing that new car for a slightly older model are enough to save for retirement (such as maxing out an IRA for the year), fund future bucket-list travels, or save for a down payment on a house, all of which seem much more worthy causes in my eyes.

Let me be clear that I’m not judging anyone for owning a brand new car. One of my most financially savvy friends drives a brand new car, one that she paid for with cash, and I don’t judge her for that decision.

Buying a brand new car is not a personal finance sin and it doesn’t make you financially unwise if you do so, it’s just not a choice I choose to make for myself, because I choose to spend my money on things that align with my values, none of which involve what I’m driving around to haul my groceries.

Here are five reasons it’s not worth it, in my opinion, to buy a brand new car.

1. No one really cares what you’re driving.


A car’s sole purpose is to get you from point A to point B. It’s not a status symbol, it does not define who you are or your amount of success, and it is not part of your identity, so let that go. Everyone is too worried about their own lives to worry about what you’re driving anyway.

2. That new car smell is toxic.


Literally. According to CBS News, that new car smell comes from a mixture of chemicals from the adhesives, plastics, and formaldehyde (a known carcinogen) used in the manufacturing process of automobiles. Thanks to VOCs and offgassing, there’s a good reason I’m actually nauseated by that new car smell.

3. It’s not worth the debt…


Just because everyone else is getting into debt for their new cars, doesn’t mean you should, too. It may be “normal,” but it doesn’t have to be your normal. It is never wise to go into debt for a depreciating asset. If you can’t pay cash for the car, then you can’t afford the car.

*Related: Need to save money on tires? Check out our guide on best places to buy tires and save big money.*

If you’re not sure how to even begin saving up the amount of money you’ll need for your car (whether it’s brand new or just new to you), opening a savings account can help you get there faster by giving you a little bit back as your money sits there.

If you’re not sure how much you should be saving towards your new goal of paying for a car in cash, free tools like Personal Capital can help you track expenses and see where your money is going, so you’ll know on an ongoing basis, how much you can wisely afford to sock away for your car purchase.

4. Or the cash you pay for it.


Now that I’m gaining momentum in my savings account after paying off all my debts, realizing how long it takes me to actually save up $30,000 or $40,000 makes me absolutely not want to go blow it to pay cash for a brand new car.

*Related: Want to sell your car on Craigslist? Read our guide on how to sell a car privately to learn how to get top dollar.*

Think about it. It’s easy to go sign on the dotted line for five years’ worth of car loan debt, and the staggering numbers on the finance papers almost seem like they’re not real. But if you actually take the time to save up the money beforehand to pay cash for a brand new car, you’re likely to decide that the trade-off of working so many hours at your job for a new car just isn’t worth the price.

5. A new car won’t make you any happier.


Just like all the other purchases we make trying to create some lifestyle ideal that we crave, a new car will not make us any happier. Don’t buy a brand new car just because you feel entitled to a new car (thanks to lifestyle creep) or because you’re trying to impress someone, like your neighbors or co-workers.

Ask yourself the real reasons you want to buy a new car, and if it’s worth indebting yourself to your job for that much longer, and hopefully you’ll make the right decision.

Is It Really Worth All That Time and Money?


Although I would never advise anyone to purchase a brand new car, the desire to own a new car is a personal choice in how you spend your money. If you’ve saved up and can afford to pay cash for the latest model car, and that’s really what you want to spend your money on, then great. Spend your money on what you want.

*Related: Not certain if you should buy or lease? Check out our leasing vs. buying a car guide to learn which is best for you.*

But if you have to finance a new car just to keep up with the lifestyle you’ve created for yourself, or to impress those around you and fish for compliments, is it really worth it? I think the answer is pretty obvious.

Additional resource: If you’re looking for a simple way to stay on top of all your finances so as to know whether or not you’re financially ready to buy a car, house or any other major purchase then check out my favorite tool – Personal Capital. Completely free, it allows you to track your spending, monitor your bank and investment accounts and watch your net worth grow plus many other tools. 

Open a free Personal Capital account today!

Do you own a brand new car today? If so, how do you feel about your past decision? Would you do it again? Have you purchased a new car in the past and regretted it (or not regretted it?)

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Robin McDaniel

Robin is a freelance writer who chronicles her financial missteps and victories on her blog


  • Holly Johnson says:

    I guess I’m not a car person! There was a time in my life when I cared about cars, but I couldn’t care less today. My car is a 2007, but it is fairly nice.

  • Money Beagle says:

    The only way I would ever buy a new car nowadays is if they had incentives where the cost was within 5-10% of a used car. But this is pretty rare.

    • Robin McDaniel says:

      Pretty rare, indeed… and I think I’d still go with the 5 to 10% savings in that scenario anyway. 😉

  • Kara @ Money Saving Maven says:

    I got the new-too expensive-ridiculous car payment phase out of my system when I was in my early 20’s. Glad that’s over!

  • Emily @ JohnJaneDoe says:

    I did buy a new Pilot a few years ago (for cash). While I love it and thoroughly intend to drive it for a long time, I would not buy it new now even if our bank balances were the same.

    For one thing, the only thing wrong with my old car was that it was smaller. It was fine for us and still very reliable, but Jon pushed me to get a heavier (and therefore safer) car. But it also got 29 MPG as opposed to the 20 I get now. I also fell in love with the idea of having the back up camera, which feels very safe but I had lived without for the previous 3 decades I’d been driving.

  • Gwen says:

    Token millennial viewpoint here. I fight to keep my perfectly functional car all the time. Is it 10 years old? Yep. But it also gets good gas mileage and hauls almost everything I can think of.

    After I started my new job, so many people asked when I was going to dump my old cat and buy new. I have a friend who is obsessed with his 2015 Subaru WRX STI. He asked me why I drove such an old car when I had a good job. He couldn’t comprehend me saving all my money instead of driving a dope car. One day I’ll get a newer car, but only when this one conks out completely.

    • Robin McDaniel says:

      Good for you for sticking to your guns and not falling to the peer pressure every time someone asks you about it.

  • Ramona says:

    I did get a new car 8 years ago. Perfect condition then, pretty good condition now, after almost a decade. It was very pricey (compared to an used one), but it was a good call since I can use it at least 15 years.

  • Andrew@LivingRichCheaply says:

    I have never owned a new car…I prefer the first owner take the depreciation hit. Although if you intend to keep the car for a LONG LONG time and also get incentives and 0% financing, it’s not bad to buy a brand new car.

  • Addi Ganley says:

    What an informative post about car buying.

    I enjoyed your list of reasons especially the new car smell being toxic…that smell always makes me instantly ill to my stomach!

    I agree, when you pull a new vehicle off the lot it immediately depreciates in value. Knowing that alone would make me hesitate to pull it off the lost lol.

    When car searching always looked at the pre-owned too. Most car manufacturers now have their own factory warranties that come with a used vehicle.

  • Unchained 55 says:

    I actually blogged about this not too long ago! We bought a brand new SUV in 2014 although I had sworn never to buy new because of the depreciation. However, the model we went for was completely redesigned that year and the fuel efficiency on our AWD SUV was even better than that of my old Mazda 3 hatchback! The financing rates were really low (and no cash discounts at the time), but the financing for pre-owned was much, much higher. I don’t regret our purchase one bit but now that a second vehicle is on the horizon, I would probably consider getting another 2014 since that model is now available resale.

  • Jason Butler says:

    I actually plan on getting another car next year. It will not be new, though. I will pay for the used car in cash.

  • Liz says:

    I kept my Saturn for 13 years and just traded it in for a 2016 Honda Accord. I paid cash as I had been saving for a while. Got an awesome deal through Sam’s Club and I chose a very safe, reliable car that holds its value well. I intend to keep it at least 10 years. So for me a new car made sense and I feel so much safer now. Plus I still got $2K out of the old car which if anything major happened to it, there are very few parts available for Saturns now and the car would be totaled. However, I will admit in my 20s I made some VERY stupid car decisions!! No more.

  • David says:

    The only reason I would buy a new car is if I needed to order it with special equipment installed. If I am going through the trouble to customize a car to fit some special needs I want it to last as long as possible. I wouldn’t want to start with something that has already used up part of it’s service life.

    • Robin McDaniel says:

      That is a good point, David. I’m lucky that I don’t need to retrofit a car for anything special.

  • Nicole says:

    My biggest fear about buying a used car is whether the previous owner took care of it properly. I purchased my current car brand new back in 2000 and it’s still going (relatively) strong today. There is a repair looming in the future that might not make sense to do, so I will need a “new” car at that point. Given the number of years I intend to keep the next car (as long as possible), I’m not sure used is the way to go. What are your thoughts? Oh, and if i makes any difference I’m looking at a Subaru Impreza which will cost under $30k, and I can pay in cash.

    • Robin McDaniel says:

      I think it’s awesome that you have a 16 year old car that you bought new that you can still drive today. You’ve clearly gotten your money’s worth out of that car, and if you did the same today, I think that’s great.

      You asked my thoughts, so I’m going to give them to you. 🙂 If I was in need of a new car and really wanted to buy brand new, I would personally still purchase a 1 or 2 year old car that’s already depreciated considerably, but is still practically new and in great shape. That way you’ve let someone else take the “new car” hit, and you still get the savings on a virtually new car. But that’s just me. 🙂 Either way, if you’re paying cash for a car, whether it’s brand new or slightly used, you’re in great shape.

  • Mary says:

    I bought a new 2015 Toyota Avalon in Feb. 2016. Almost $10k under sticker . Paid cash. I’m 61 retired at 57 and I live on the interest and dividends of my savings. I drove used cars my entire life. Gotta tell ya, feels good.

  • Wally1 says:

    I came across this site because I actually can’t stand the tech in new cars. I am a real car guy, I rebuild my own engines, transmissions etc. I actually try not to buy anything built after 1971. The early cars are easy to work on, retain or increase in value, great fuel mileage and great reliability. Best part, I can work on it and never lost a cent when I sold any of them. I have owned over 50 cars in my life. I would rather buy a old vehicle, spend 10 to 15,000 to restore it than buy anything built today. Best part, they are fun to drive!

    • John Schmoll says:

      That’s awesome Wally! My father-in-law has a similar mindset and hates dealing with more modern cars. There’s something to be said about the value of having something not considered “modern.”

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