Is it smarter to buy new or used?

For pure economics, a 2-4 year old used car is typically the sweet spot - major depreciation absorbed, still modern and reliable. New makes sense if you plan to keep it 10+ years or want specific features.

Do I pay more interest on a used car loan?

Yes, typically 1-3% higher. Lenders see higher risk in older vehicles. However, the lower loan amount often means less total interest despite the higher rate.

§ Tool · tier 1 · independent

New vs Used Car Calculator.

Compare the true cost of buying new versus used over time

CalculatorFree, no signupOn-deviceupd May 2026

Inputs

Your numbers

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Move the sliders or type in the form on the left — the math updates live as you go. Click Get AI verdict when you want a written analysis.

New car smell or better value? This calculator compares the true cost of buying new versus used, factoring in depreciation, interest rates, and running costs.

§ Worked examples

Real-world scenarios

Family SUV Comparison

New Mazda CX-5 at $45,000 vs 3-year-old same model at $28,000 with 45,000km.

Inputs

newPrice:45,000usedPrice:28,000usedAge:3

Over 5 years: New costs $32,000 in depreciation. Used: $12,000. Even with higher rate, used saves ~$15,000 total.

§ FAQ

Questions Australians ask

§ Glossary

Plain-English definitions

Depreciation

The loss in value as a car ages. Typically 15-25% in year 1, then 10-15% per year.

Certified Pre-Owned (CPO)

Used cars inspected and certified by manufacturers, often with extended warranty.

Drive-Away Price

The total price including all on-road costs - what you actually pay to drive the car away.

§ Pair it with

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Depreciation Calculator

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Total Cost of Ownership

Full cost including all expenses

Car Loan Calculator

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How to use

01Enter the new car price (drive-away)
02Add the used car alternative price
03Include the used car's age and kilometers
04Compare interest rates for each option
05Set how long you plan to keep the car

Key info

New cars depreciate 15-25% in the first year alone
A 3-year-old car has already absorbed major depreciation
New cars often have lower interest rates and warranty coverage
Used cars may have higher maintenance and insurance costs

Pro tips

Consider certified pre-owned for warranty protection on used
Check the specific model's depreciation curve - some hold value better
Factor in warranty - new cars have 3-7 years, used may have none
Look at 'nearly new' demos or ex-rental for best value

Avoid these

Only comparing sticker prices without considering total cost
Ignoring depreciation - the biggest cost of car ownership
Not factoring in the higher interest rates on used car loans
Forgetting that older cars need more repairs

Disclaimer: Estimates only. Interest rates, fees and policies change frequently. Always verify with lenders directly. General information, not personal financial advice.

Last updated · May 2026