What happens when a new car becomes used?

After a new car is purchased and registered in the customer’s name, it becomes a used vehicle. This distinction could offer someone looking for a low-mileage or new vehicle the opportunity to save money.

New cars have lost value or depreciated over time. A used car with low mileage can be like buying a brand new car at a discount. These cars may be attractive, but buying new can sometimes be a better choice.

Recall that a car purchased new becomes a car used as soon as the customer purchases it and transfers title. There are some quirks to the car-buying process.

Some dealers offer customers the opportunity to return their car and use the funds to buy another car. Brian Moody, executive editor at Autotrader, said that policies like these aren’t common. Even if dealers offer this option, it may not be possible to halt the registration process with the state.

Cars are equipped with an odometer, which tracks usage unlike most other products. Mark Holthoff (senior editor at Carvana), says that a new car could theoretically have zero miles and still be in use. Some cars are kept on the lot for testing drives. It could have 5,000 miles. This is considered a new car .”

While most new cars won’t be able to go 5,000 miles, the majority won’t have zero miles. Moody states that even if the car isn’t used as a test vehicle, it may still have a few hundred, owing to customer test drives, going to the dealership, or salespeople testing it. Don’t use it as a bargaining tool. However, if you spot a car with more than 2,000 miles, it might be worth asking about.

The car’s model year is an important part of its listing. This can lead to confusion. A car that has not been bought is still considered a new car even if it is manufactured.

The introduction of new models every year was traditionally a buying opportunity. Dealers and manufacturers often offered discounts to clear out older inventory. Holthoff says that the differences between models have become less noticeable over the past decade. Car manufacturers often release model updates in a staggered fashion throughout the year to avoid flooding the market with too many new models.

You won’t find a great deal if you get a discount on an older model vehicle. If a model is undergoing a major redesign, you will be able to find a discount.

If you are looking for a bargain on a car, consider buying a used car with very low mileage. It’s not difficult to find used cars with less than 10,000 miles.

Ivan Drury is the director of insight for Edmunds. He says that the goal of scoring a deal in this manner makes sense. It doesn’t matter if the car is new or used. However, you may end up paying more for a used vehicle if financing is more costly and there is a shorter warranty. You should evaluate each option individually, not assume that one is always cheaper.

When deciding between a brand-new car and its similar-new counterpart, consider the following:

• What are your financing options for new cars? New car loans typically offer lower rates than used cars and often include cash-back incentives. These factors, along with the sticker price, will determine how much you’ll have to pay over the term of your loan. When comparing a new vehicle with an equivalent used car, you should compare the rates available for each. If the rate is low enough, the car with a higher price tag could be less expensive to buy. This is irrelevant if you pay with cash. NerdWallet recommends that financing be used with a 10%-20% down payment.

• What warranty coverage do you value? A used car’s factory warranty will often transfer to the new owner. You should check which warranties you will receive before you purchase. Warranty details can vary and not all warranties are factory warranties. Even if the factory warranty does transfer, it will likely be based on mileage and when it was purchased. Some shoppers may be willing to pay more for a new car if they can avoid potential repairs over a longer time.