Cost

• According to MsMoney.com, new cars lose about 40 percent of their value within the first three years. If you purchase a 2- or 3-year-old car, you can save a considerable amount of money compared to buying a new vehicle. Your insurance premium also will be lower than what you would pay for a brand-new car.
  
  

Depreciation

• Because the greatest amount of a car's depreciation occurs during the first three years, you'll have a better resale value if you purchase a used car (compared to what you will pay), because the depreciation rate will be much slower.
  
  

Options

• When you buy a brand-new car, you can select colors, option packages and add-ons, such as an upgraded sound system, a sunroof, or remote door locks. If the dealer doesn't have a suitable new vehicle on the lot, he or she can order it for you from the factory or find one from another dealer. When you buy a car that is 2 or 3 years old, your choices limited. You may have to make some trade-offs, such as choosing a car that is not your preferred color but has some of the equipment options that are most important to you.
  
  

Warranty

• Most new-car manufacturers provide bumper-to-bumper warranties for at least three years. If you purchase a new vehicle, you won't have to worry about any repair costs during that period, except for routine maintenance. If you buy a used car, you may get little or no remaining warranty. That may leave you liable for anything that goes wrong with the car after you buy it and the residual warranty expires.
  
  However, some dealerships sell certified used cars. Those vehicles undergo detailed mechanical inspection and include warranty extensions. For example, Honda's certified used cars come with one year of full coverage if the original warranty has expired. Be prepared to pay more for a certified used car. Cars.com states that those vehicles usually cost 2 to 8 percent more than a non-certified vehicle.
  
  Used-car retailer CarMax offers a 30-day warranty on its used vehicles, and buyers can purchase an optional extended service plan.
  
  

Safety

• New cars may be safer than older models because they have the latest safety equipment. Improvements are made every year, so a 2- or 3-year-old vehicle may have older generation equipment that will not offer as much protection as its newer counterparts. New cars often have better safety records, too, due to improvements in design that improve crash-test performance. The Kelly Blue Book Safety Center (www.kbb.com) is an excellent resource for safety information. It lets you research available options and statistics on used and new models.
  
  Used cars also may have been subject to recalls that were not fulfilled. The Recalls.gov website will let you check that information. If you are considering a car that had a recall, make sure the repair has been made before purchasing it.
  
  

Reliability

• If you are buying a new model during its first year of availability, you won't know its reliability statistics because they won't be established yet. If you buy a 2- or 3-year-old car, you can look up data on its past mechanical performance, strong points and potential problems via sites such as Kelly Blue Book (www.kbb.com).
  
  

Fuel Economy

• Newer cars may be more fuel efficient that older versions of the same model. The Fueleconomy.gov website will let you compare statistics and view MPG data from actual drivers who have owned the vehicles you are considering.