Why Your Used Car is Greener (and Smarter) Than a New Hybrid

By on

There’s no arguing that the American love affair with the automobile is alive and well. According to The New York Times, Americans purchased a whopping 14.5 million new vehicles in 2012, and the forecast for 2013 anticipates sales to hit the 15.5 million mark.

I have to admit, I’ve always been a little mystified by the sheer eagerness with which folks purchase brand-new cars. There must be something profoundly intoxicating about a cocktail that combines new-car smell with a dash of easy credit and aggressive sales tactics. It’s a mystery that warrants installing a Breathalyzer at every new-car sales counter, just for fun.

A few weeks ago on Facebook, a friend of mine posted a photo of himself standing proudly beside his new hybrid. It made me recall a similar post he made just two years earlier standing next to his shiny new crossover.

As if in defense of this latest purchase, his post explained that the hybrid would save him some serious cash on fuel. And his justification isn’t a novel one. People rationalize the need for a new car with a long and creative list of reasons. Abandoning good (even nearly new!) used cars to make the switch to hybrid is just the latest in a well-worn grab bag of logical-sounding but deeply flawed pretexts.

At the risk of sounding like I suffer from a particularly bitter case of sour grapes, I’d like to explore just a few ways in which buying a new car — hybrid or otherwise — could actually work against the environment and your wallet.

Manufacturing is energy-intensive

Buying new supports demand, and manufacturing all those new cars is an energy-guzzling proposition. Designing, testing, building, marketing, shipping and selling a new car means that every one rolls off the assembly line with an attached carbon debt. And while broad figures on the carbon footprint of the auto manufacturing process are hard to come by, this article by The Wall Street Journal explores the paradox that many “green” cars present to eco-conscious buyers.

In contrast, a used car is a fait accompli — an established fact. Keeping the one you have or scouting around for another quality pre-owned car simply lengthens the serviceable years of an existing fleet. Considering that reuse is a fundamental tenet of the green movement, why not start with that 3,000-pound thing in your garage?

What you save in fuel, you spend in other ways

Don’t get me wrong, I’m all for trying to save money at the pump. But the equation is more complicated than a simple shell game will solve. Hybrid or not, new cars have more efficient engines and lighter bodies than their older counterparts, and you’ll be glad about that when it’s time to fill up. But there’s a host of other costs that new cars carry:

  • Taxes and depreciation. Since buying a new car typically means spending more, consumers immediately get hit with a steep sales tax payment. And when you combine that with financing charges and normal depreciation, it becomes harder and harder to imagine how those miles-per-gallon savings will ever be able to put you back in the black.
  • Steeper insurance costs. Depending on the age and replacement value of their used cars, many drivers choose to carry liability coverage only. But with a new car, say goodbye to that budget-friendly flexibility. Considering the investment a new car represents, comprehensive and collision insurance is practically a must-have and it’s usually required if the car is financed. And, according to Edmunds.com, insurance costs for hybrids are anything but black and white. Some insurers see hybrid owners as more responsible drivers and charge slightly lower premiums. Others take the opposite view, charging higher premiums because hybrids’ complex engines and powerful batteries often mean higher repair costs.
  • Higher registration and title fees. Though the fees and formulas vary by state, auto registration charges are often based on the age and value of your car. Just like insurance coverage, higher car values can equal higher registration costs.
  • Potentially more expensive repairs. We want our new cars to stay new for as long as possible. Small issues that aren’t covered by the warranty, but that we would otherwise live with, get fixed. We feel compelled to get the door dings touched up, investigate each rattle and shake, and resolve every issue, no matter how incidental. Essential repairs can cost more too; today’s cars are sophisticated rolling computers that take time, skill and money to repair.
  • The expense of add-ons and recalibrated standards. New cars come with temporary promotional extras that we tend to cozy up to quickly. Features like satellite radio and emergency road service are great, but once the promotional periods end, we have a brand-new set of expectations and overhead expenses. Likewise, our new rides get babied quite a bit (at least for a while) and all those hand washes and detailing costs can add up.
  • You become one of the Joneses. Whether we appreciate it or not, we are all part of a broad and complex network of people. Family, friends, co-workers, neighbors and social media contacts comprise just part of our personal sphere of influence. When we make a major new purchase, we (purposely or inadvertently) create a ripple. That ripple is unrest and, as it moves outward, it ever so subtly creates more demand. Our friends look at their old beaters with a bit more embarrassment. Our neighbors begin to wonder what they’re doing wrong to still be driving a 10-year-old station wagon. Our in-laws may stop at a car dealership and kick a few tires on the way home from our dinner party. It’s the keeping-up-with-the-Joneses phenomenon at work — and it’s a not-so-green force that many businesses depend on.

Sure, trading up to a new car every couple of years is a time-honored tradition that our parents or grandparents enjoyed, but I’m not sure it makes sense anymore (if it ever did). From a financial perspective, buying new is a budget-buster and after we wipe away the green-washing, it’s easy to see how buying new may not be that great for the environment.

Our world’s new economic realities and our ever-increasing environmental sensitivities should give us pause before we chuck our serviceable older car or turn up our nose at the thought of shopping around for a pre-owned one that’s proven its value. Far from sour grapes, buying used just might be the sweetest thing you can do for your pocketbook and the planet.

What do you think about buying new? Does it make sense for your wallet or the environment? Comment below or on our Facebook page.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,035 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • Nancy

    While I would love to have an electric car or hybrid, I most likely never will. I’m 60 and finally debt free. I have no intention of financing a new car or of spending a new-car price on one. It just wouldn’t provide good return on investment. The car I have is a 2006 Toyota Camry in excellent condition and with low total miles (less than 70,000). I get nearly 30 miles per gallon of gas. I believe it’s better for the environment to keep my present car, maintain it well, and drive it as little as possible. If I should need another car in the future, I intend to buy a newer model used economy car.

    • jhartvu

      CSB.

      • Nancy

        Sarcasm + acronym = lazy

  • Jason

    You should do fine. The slight increase in purchase price will be offset by the decreased fuel cost.

    We did the same thing. We purchased a 2 year old Prius in 2007 and have never regretted the decision. So far I have averaged 46.7 mpg and at 117K mile the original brake pads look almost new. We liked it so much that when it came time to replace our 10 year old VW TDI last year we purchased another used Prius.

  • CSCS7

    Good article; lots of good points to consider. I share a 2004 (?) Honda Civic with a family member. When I can afford to buy a car I’d like to try a new or not too old Mustang. Not sure what year I should go for. I’ve found excellent reviews, it’s iconic, and seems like a fun car to drive. Blue, white or dark reddish, auto, convertible, please. :)

  • Sharon J

    My 1987 Maxima had 200K and we had it till 2001. 14 years, the frame rusted out. Now my 2001 Corolla, 110K and we have had it 12 years. 2 repairs, 1. was caused by Ethanol in the gas, the other from a giant pot hole. So that’s less than $1,000 in 12 years. That’s 1500 per year. AND we get 31mph in mixed driving. Why would I want to go into debt for a “New” car????

    • Kent

      Stay away from ethanol. It is worth it to buy straight gas, even high test if you need to. There is less energy in ethanol and it is not good for your engine.

  • N_Jessen

    I somewhat agree with the article, but the best practical technologies need to see demand if they’re to attain the economies of scale we see in the conventional car market. Like regenerative braking systems (and/or variable cylinder management for those in the habit of buying big) that can enhance a vehicle’s fuel economy vs. a comparable according to current EPA calculations (because we know anecdotal estimates can be all over the place).

    Just from population growth and the final death of old cars there will be a need for new vehicles, while at least around here used cars have been in short supply (and thus more expensive). So if someone is financially secure/can truly afford new, maybe they should make the investment and hold onto it for 5-10 years, then pass their older car onto someone who can’t financially justify a new hybrid or whatever.

  • Kent

    You want to buy your used car from an old guy who didn’t drive much and took really good care of it.
    Stay away from anything else.