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Car Shopping. Should You Buy New Or Used? Let Us Help You Decide.

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The car shopping market is presenting drivers with the same classic dilemma: should you buy new or used? But, there are modern-day considerations as several factors and current events shape this debate, including depreciation trends, interest rates and price shifts in both new and used car markets. Making the right choice requires a close look at your financial situation and ownership goals.

Our friends Zach & Ray Shefska, Co-Founders of CarEdge, offer an easy-to-understand breakdown to help consumers make this all-important decision that will impact them for years to come.

When to Buy New:

  • You plan to keep the car for 5+ years and want the latest features.
  • You qualify for low APR financing and want predictable monthly payments.
  • Manufacturer incentives significantly reduce the cost.
  • To avoid depreciation altogether, consider leasing a new car.

When to Buy Used:

  • You want to avoid rapid depreciation and pay less upfront.
  • You’re willing to shop for 3-5 year-old vehicles in good condition.
  • You don’t mind driving a car with fewer bells and whistles.
  • You’re prepared to negotiate a great used car deal.

Here are details on some of the key considerations to help you determine whether buying new, buying used, or leasing makes the most sense for you.

Financing Deals Versus Depreciation Risks

New cars are known for their steep depreciation. A new car can lose 20-30% of its value within the first two to three years of ownership. However, buying new has its advantages, too. Manufacturer incentives are sweetening the deal for buyers with attractive lease offers, low APR financing, and cash incentives that simply aren’t available for used car buyers.

Why Buy New?

  • Incentives Galore: Automakers are offering competitive promotions to attract buyers, including 0% APR financing and cash-back deals.
  • Peace of Mind: New cars come with full warranties, the latest safety features, and no concerns about wear and tear from previous owners.
  • Custom Orders: Buying new allows you to select the exact trim, color, and features you want. However, custom orders can come at an even higher price.

Drawbacks of Buying New:

  • Higher Initial Cost: Even with incentives, new cars come with higher upfront prices compared to used options.
  • Depreciation Risk: If you plan to sell your car in less than five years, you’ll likely face a significant financial loss due to depreciation.
  • If you’re considering a new car but worry about depreciation, leasing may be a better option for you. It allows you to enjoy the benefits of driving new without the financial impact of resale value losses.

Interest Rates Matter – New Cars Have Lower Rates

Interest rates are a defining factor in the new versus used car debate. While borrowing costs remain high, automakers make it easier to finance new cars by offering low APR financing. Used car loans, on the other hand, often come with higher interest rates from banks and credit unions.

Why New Cars Win on Interest Rates:

  • Lower APR Offers: Many manufacturers are advertising rates as low as 0% APR for new car buyers, helping you save thousands over the life of the loan.
  • Better Loan Terms: Lenders tend to offer more favorable terms for new cars compared to used, including longer loan periods and lower down payment requirements.

Used car loans typically come with interest rates about 5% higher than those for new vehicles. Over a five-year loan term, this can significantly increase the total cost of financing a used car. If monthly payments are a concern, financing a new car with low APR may actually make more financial sense.

However, NEVER negotiate monthly payments – always negotiate the Out-the-Door Price to avoid add-ons and ripoffs.

New Tools Make Negotiating Easier Than Ever

The days of guessing what to pay for a new car are over. Today, buyers have access to tools that provide insight into dealer pricing, invoice costs, and manufacturer incentives.

How to Save Big When Buying New:

  • Use Dealer Invoice Pricing: This allows you to see what the dealer pays for the car and giving you leverage in negotiations.
  • Keep Up With Local Market Trends: Today, any car buyer in America can see the ins and outs of their local car market for each make and model..
  • Compare Offers Across Dealers: With free online tools, you can easily master the art of negotiating. A big part of this is learning how to effectively cross-shop between dealerships. Always compare prices and incentives from multiple dealerships to ensure you’re getting the best deal.
  • Leverage Manufacturer Incentives: Research available incentives to maximize your savings before heading to the dealership. We gather the best incentives in one spot for you.

These tools make it easier than ever to negotiate confidently and secure the best deal on a new car. That said, deals can still be hard to come by without the right negotiating tools.

Why Consider Buying Used?

  • Lower Upfront Costs: Used cars are more affordable than their new counterparts, making them a better choice for budget-conscious buyers. Saving $100 or more on monthly payments over five to six years really adds up!
  • Avoid Steep Depreciation: Buying a 3-5 year-old used car allows you to avoid the steepest depreciation period, saving you thousands. If you decide to sell in a few years, you won’t feel the heavy depreciation that a new car buyer in a similar situation would experience.
  • Used Cars Are Negotiable: As competitive new car incentives remain, fewer car shoppers are heading to the used car lots. A slump in demand is good news for those willing to negotiate used car prices.

Challenges of Buying Used:

  • Higher Interest Rates: As mentioned earlier, used car loans often come with higher APRs, which can offset some of the savings. The average used car loan rate in North America is nearly 14% APR.
  • Limited Incentives: Unlike new cars, used vehicles don’t come with manufacturer promotions or warranties. However, you can get a fair deal on an extended warranty.
  • Condition Concerns: Always get a pre-purchase inspection to avoid surprises with hidden issues.
  • Despite these challenges, buying used is still the go-to option for many drivers who prioritize affordability and don’t mind sacrificing the latest features.

For many car buyers, a 3-5 year-old used car strikes the perfect balance between affordability, reliability, and long-term value. This “sweet spot” in the used car market offers significant benefits that make it a smart choice for budget-conscious drivers who don’t want to sacrifice quality or performance.

Here’s why a 3-5 year-old used car could be the ideal option for you:

  • Avoid Steep Depreciation – New cars typically lose 30-40% of their value within the first three years, making depreciation one of the biggest hidden costs of buying new. 
  • Lower Upfront Costs – Compared to buying new, 3-5 year-old used cars are significantly more affordable.
  • Modern Features Without the Premium – A car that’s 3-5 years old still comes equipped with many of the features found in today’s new models, such as advanced safety systems and driver assistance.
  • Remaining Warranty Coverage (Depending on Mileage) – A 3-5 year-old car is typically well within its prime and often covered by a portion of the manufacturer’s original powertrain warranty. If coverage is about to run out, get an Extended Warranty quote for peace of mind.
  • Better Financing Options Compared to Older Cars – While interest rates for used car loans are higher than those for new cars, lenders generally offer better rates for late-model used cars compared to older vehicles. This makes financing a 3-5 year-old car more manageable and less risky.

How to get the best of ‘both worlds’

By choosing a 3-5 year-old used car, you get the best of both worlds: modern features at a lower price, and the ability to avoid the financial pitfalls of buying new. It’s a smart compromise for car buyers looking for value and reliability. To ensure you’re making a wise investment, always research market trends, request vehicle history reports, and schedule a pre-purchase inspection before buying any used car.

Founded in 2019 by father-and-son team Ray and Zach Shefska, CarEdge is a leading platform dedicated to empowering car shoppers with free expert advice, in-depth market insights, and tools to navigate every step of the car-buying journey.

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Pros And Cons Of Buying A Car On Amazon Autos

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Amazon’s move into online car listings through Amazon Autos in 2024 has been widely framed as a breakthrough for consumers. But, for buyers considering this new option, the real story is more nuanced. While the platform offers a familiar, streamlined shopping experience and no-haggle pricing, it does not eliminate dealerships, negotiations behind the scenes, or the traditional profit structures that shape car pricing.

A quick heads up fellow Canucks- Amazon Autos is not yet available in Canada but plans are in place for expansion so stay tuned.

Trade Offs

As more North Americans explore buying a vehicle through alternative means including Amazon, experts say the key question isn’t whether it’s easier, but whether shoppers understand the trade-offs they’re making. Knowing the pros, the cons, and the fine print can be the difference between convenience and costly compromise.

What Works, What Doesn’t, and What to Watch For When Buying a Car on Amazon

amazon autos.png

Is It A True Breakthrough?

Amazon’s move into online car listings through Amazon Autos has been widely framed as a breakthrough for consumers. But, for buyers considering this new option, the real story is more nuanced. While the platform offers a familiar, streamlined shopping experience and no-haggle pricing, it does not eliminate dealerships, negotiations behind the scenes, or the traditional profit structures that shape car pricing. As more Americans explore buying a vehicle through Amazon, experts say the key question isn’t whether it’s easier, but whether shoppers understand the trade-offs they’re making. Knowing the pros, the cons, and the fine print can be the difference between convenience and costly compromise. 

Amazon Autos, has generated headlines over the past year for a number of reasons. Some heralded the launch as a true game changer in the car market. But in reality, buying a car on Amazon is not all that different from buying a car the old fashioned way.

Participating automakers (like Hyundai) or dealers (like rental car giant Hertz) can now list their inventory on Amazon. But make no mistake: you’re still buying from a dealer. Amazon Autos is only acting as an online marketplace for cars, meaning that the cars you see listed are only there because traditional car dealers listed their inventory on the platform. Amazon is just making online car shopping feel like the Amazon experience that nearly 200 million Americans are familiar with.

There are pros and cons of buying a car on Amazon.

Amazon advertises no-haggle pricing, but there’s something crucial that most shoppers overlook: that rarely means you’re truly getting the best price possible. No-haggle pricing is crafted by dealers to ensure healthy profit margins on their end, while making consumers feel relieved that they don’t have to deal with unpleasant negotiations or salespeople. The truth is, buying the actual vehicle still takes place at a dealership. There are still salespeople involved. It can still be inconvenient or uncomfortable.

Dealers are thrilled with the assumption that pricing is already agreed upon before the customer even arrives. Remember, dealers have plenty of profit in the form of holdbacks, manufacturer-to-dealer cash, and even volume bonuses. That’s not to mention more money for them if you finance with them, or purchase an extended warranty or other add-on.

All of this means that you’re much more likely to overpay than if you were to go your own way and negotiate confidently.

In summary, when you buy a new or used car on Amazon, you’re still buying through a traditional dealership. Amazon doesn’t hold any of the inventory you see online, they’re merely adding the online Amazon experience many consumers are familiar with to online car shopping. In most cases, that means trading competitive pricing for convenience.

For some, that may be a compromise you’re willing to make in order to skip the haggling process. But it’s important to know that you’re limiting your ability to land a great deal when you forfeit your chance to negotiate car pricing.

Research Required

To best ensure you’re not leaving money on the table, thoroughly research the car market. Always research demand factors for the cars you’re interested in. Are you shopping for a car that’s less popular than the hottest sellers on the market? Does it sell slower than the market average in your area? If so, you’re much more likely to overpay with ‘no-haggle pricing’. Find inventory that has been sitting on the dealership lot the longest. Those are the cars that dealers are motivated to sell at a discount.

For the Silo, Justin Fischer.

Justin Fischer is an automotive retail analyst and consumer advocate at CarEdge, a leading consumer platform dedicated to empowering car shoppers to make confident, informed and financially savvy decisions.

Sci-Tech

Would You Use AI For Buying A Car? One In Four Buyers Already Do

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A recent consumer survey backed by similar results from Elon University reveals that AI adoption for car shopping is skyrocketing, rapidly becoming a standard part of the automobile buying process. This as fully one in four buyers have already used AI tools this year to research, compare prices, negotiate and otherwise outsmart dealerships, and an overwhelming 88% found it helpful. Signaling a seismic shift in the way North Americans are now shopping for cars, nearly half of consumers indicated plans to use AI in their next purchase. Not just for buyer benefits, dealerships are gleaning critical business intelligence from AI to inform sales strategies, train staff and elevate customer engagement. The below  report from our friends at CarEdge, which offers its own AI Negotiator car buying tool saving shoppers thousands, details the first data-backed look at how AI tools are reshaping the car buying experience.

Mornine- AI powered car dealership robot.

Study: 1 in 4 Car Buyers Tap AI for Better Deals


Artificial intelligence is changing the way North Americans buy cars, and it’s a transition that is happening quickly. In the first-ever survey of its kind, CarEdge asked 500 car shoppers if they’re using AI tools like ChatGPT to research, compare, and negotiate during the car buying process. The results confirm a major shift is underway. One in four car buyers in 2025 are already using AI tools to gain an edge, and future buyers are even more likely to embrace these technologies.

Car buyers are finding AI to be a valuable tool. Among those who used tools like ChatGPT, Perplexity, Google Gemini, and others, 88% said it was helpful. AI is quickly becoming a trusted co-pilot for car buyers.

Key Findings: Car Buying Is Changing

The 2025 CarEdge AI & Car Buying Survey reveals a clear and growing trend: AI tools are quickly becoming part of the car buying process for a significant portion of consumers. Here are the standout findings:

1 in 4 Car Buyers Use AI 

25% of car buyers in 2025 say they used or plan to use AI tools like ChatGPT during the shopping or buying process. This contrasts with a recent survey by Elon University that found 52% of Americans now use AI large language models. While signs point towards increased adoption of AI tools, the CarEdge survey found that most car buyers are still in the early stages of integrating these tools into high-stakes decisions like vehicle purchases. This suggests there’s still significant room for growth in AI adoption amongst car buyers.

AI Use Is Accelerating

Among those who haven’t bought a car yet this year, 40% say they are using or plan to use AI tools during their search or deal-making. This is nearly 3x higher than the 14% seen among those who already bought a car earlier in the year.

AI Tools Deliver Results

Among those who used AI:

  • 88% say the tools were helpful
  • 32% found them very helpful
  • 60% used them “a lot” during the process

The AI Holdouts: Drivers Who Lease

Of the respondents who had already leased a car in 2025, none reported using any AI tools.

The AI-Adopting Buyer: Who’s Using It, and How?

AI adoption among car buyers is still in its early stages, but clear trends are beginning to emerge.

Among Buyers Who Already Purchased in 2025:

Just 14% of those who already bought a vehicle this year used AI tools during the process. Adoption rates were nearly identical across new and used buyers, with 14% in each group saying they used AI tools.

Among Future Car Buyers:

The numbers jump significantly when looking at those who haven’t yet bought in 2025. Among this group — who represent 39% of total respondents — 40% say they either already use or plan to use AI tools during their car search and buying process.

That’s more than triple the current usage rate among recent buyers, suggesting AI adoption is accelerating as awareness grows and tools become easier to use.

This group also appears to be more proactive: 60% of those who used AI tools during their buying journey said they used them “a lot,” while 40% used them only occasionally.

What Car Buyers Are Using AI Tools

AI tools are quickly becoming essential research companions for car shoppers looking to make more informed, confident decisions. After all, why go it alone when a wealth of automotive knowledge powered by large language models (LLMs) is right in your pocket?

Among buyers who used AI tools during their car purchase or lease process, here’s how they put them to work:

88% — Researching Vehicles

The most common use by far, AI tools helped buyers learn about different models, trims, features, and reliability. For many, it was like having an always-available expert to explain the pros and cons of their options.

64% — Comparing Prices and Market Values

Buyers used AI to better understand fair pricing, from invoice pricing to out-the-door. 

44% — Learning Negotiation Strategies

Nearly half of AI users leaned on these tools to prepare for conversations with salespeople. Whether role-playing negotiation scenarios or asking how to spot add-on fees, this group used AI to level the playing field at the dealership.

11% — Exploring Finance and Lease Options

A much smaller portion of buyers used these tools to become familiar with leasing vs. financing, how to calculate payments, and similar queries.

Industry Implications

Car buying has always been tilted in favor of the dealership. Information asymmetry — what the dealer knows versus what the customer knows — has long been the source of consumer frustration, confusion, and overpayment.

That dynamic is beginning to shift.

This survey confirms what many in the industry are only starting to realize: AI is giving car buyers the upper hand. Tools like ChatGPT are helping consumers cut through the noise, ask smarter questions, and avoid common dealership traps. Instead of relying on guesswork or scattered advice, buyers are turning to AI for fast, personalized guidance at every step.

But one auto industry veteran has words of caution for buyers relying heavily on AI tools.

“It’s both surprising and a little scary to see how quickly people are turning to AI to guide such a major financial decision,” said Ray Shefska, Co-Founder of CarEdge. “While tools like ChatGPT can be powerful, they’re only as good as the data behind them. AI should complement your research, not replace your own critical thinking.“

That perspective underscores the real takeaway of this report: AI works best when it’s used thoughtfully as a tool, not as a crutch. In an age where automation raises fears of job loss or decision-making without human oversight, this survey offers a more optimistic view — one where technology helps everyday consumers make smarter choices. Used wisely, AI can help level the playing field and bring more transparency and fairness to the car buying experience.

Methodology

This survey was conducted by CarEdge between June 19 and June 24, 2025. A total of 500 U.S. respondents participated, recruited through the CarEdge email newsletter and social media channels. Questions were tailored based on buying status to better understand how and when AI tools were used in the car shopping process.

For the Silo, Karen Hayhurst.

About CarEdge
Founded in 2019 by father-and-son team Ray and Zach Shefska, CarEdge is a leading platform dedicated to empowering car shoppers with free expert advice, in-depth market insights, and tools to navigate every step of the car-buying journey. From researching vehicles to negotiating deals, CarEdge helps consumers save money, time, and hassle, hundreds of thousands of happy consumers have used CarEdge to buy their car with confidence. With trusted resources like the CarEdge AI Negotiator tool, Research Center, Vehicle Rankings and Reviews, and hundreds of guides on YouTube, CarEdge is redefining transparency and fairness in the automotive industry. Follow them on YouTube, TikTok, X,  Facebook, and Instagram for actionable car-buying tips and market insights. Learn more at www.CarEdge.com.

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Auto Retail Finally Being Disrupted By AI

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With AI reshaping everything from finance to fast food, the $1.5T auto retail industry is finally facing its overdue disruption. The typical car-buying experience—riddled with hidden fees, lead bloat, pricing games and low trust—has remained stubbornly analog. But now, with 90% of dealerships in America (and growing % in Canada and Mexico) experimenting with AI tools and 1 in 4 buyers already using AI to shop, the tide is turning. Agentic AI  technology is fundamentally reshaping one of the most significant purchases in a person’s life.

Zach Shefska, Co-Founder and CEO of CarEdge, asserts that agentic AI is the key to rebuilding trust, removing friction and leveling the playing field for both buyers and sellers. From AI-powered shopping assistants that negotiate on your behalf, to data tools that reveal deceptive dealership practices, Shefska is a pioneer in “agentic AI” — a new form of artificial intelligence bringing much-needed transparency to the industry.

  • The Broken Status Quo: Car buying is frustrating and inefficient for both consumers and dealerships—highlighting key stats like 72% sales staff turnover and 2% lead conversion from third-party platforms.
  • Lead Generation Platforms Are Failing: Legacy systems flood dealers with unqualified leads, drain resources, and deliver minimal value to consumers.
  • The Rise of Agentic AI in Auto Retail: Consumers are turning to tools like ChatGPT and CarEdge’s AI agent to navigate purchases with more confidence, speed, and clarity—25% are already doing it.
  • From Friction to Fluidity: Agentic AI replaces quantity with quality—streamlining the buyer’s journey, reducing information overload, and improving dealer efficiency.
  • The End of Pricing Games: AI tools now collect and publish out-the-door pricing from thousands of dealerships, exposing hidden fees and rewarding transparent sellers.
  • The Future of Negotiation: AI agents can negotiate on behalf of both buyers and sellers—minimizing stress, cutting transaction times from days to hours, and removing the adversarial edge.
  • Real-World Impact Stories:  One buyer saved $1,280 and hours of back-and-forth using CarEdge’s agentic AI—illustrating AI’s practical value in real-life scenarios.
  • AI Helps Honest Dealers Win: In a trust-starved industry, AI gives reputable dealers a new way to stand out by offering full transparency and faster deals.
  • What’s Next for AI in Auto Retail: The emerging frontier: AI agents dynamically collecting and updating real-time pricing and inventory data across markets to offer true market intelligence.

For the Silo, Zach Shefska. Zach is CEO of CarEdge, a leading platform—founded by father-and-son team Ray and Zach Shefska—dedicated to empowering car shoppers with free expert advice, in-depth market insights and tools to navigate every step of the car-buying journey. From researching vehicles to negotiating deals, CarEdge helps consumers save money, time and hassle. Alsop with trusted resources like the CarEdge Research Center, Vehicle Rankings and Reviews, and hundreds of guides on YouTube, CarEdge is redefining transparency and fairness in the automotive industry. Connect with Shefska at www.CarEdge.com or on social media on YouTube, TikTok, X,  Facebook, and Instagram.