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

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Image Not Available

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.

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.