Unless you’re a car collector, having to buy a new car can come with a sense of dread at the big expense. Add in the confusion about how new and forthcoming tariffs on foreign trading partners may affect the costs of car manufacturing, and even the price of gas, and this year could feel like a really stressful time to buy a new car.
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However, what about used cars? To get a simple answer to this potentially complex question, I asked ChatGPT whether or not I should buy a used car in 2025, and here is what it said.
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Weigh These Factors
Ever the analyst, ChatGPT didn’t give me a straight answer, but instead suggested that anyone thinking about buying a car this year consider the following facts:
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Lower Initial Cost: Used cars are “significantly cheaper than new vehicles,” ChatGPT pointed out, which means you pay less upfront and monthly than if you buy a new car.
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Reduced Depreciation: Your new car starts losing value in its first year — as much as 20% to 30%. “A used car helps you avoid this steep depreciation,” ChatGPT said.
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Lower Insurance Costs: Insurance premiums can be steep on new cars, and are typically lower on used cars, “potentially saving you hundreds per year.”
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Availability: Post-pandemic supply chain issues are stabilizing by 2025, making used cars more abundant, and potentially more affordable.
Factors To Carefully Consider
Those factors above aren’t the only ones to weigh. From current economic uncertainty to technology, maintenance and other costs, cars can come with unexpected costs. The most important factors to consider, according to ChatGPT, are:
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Interest Rates: Interest rates “remain unpredictable,” ChatGPT wrote. High interest rates could put new cars out of range and make used cars a more frugal bet.
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Reliability and Maintenance Costs: On the other hand, used cars are often older models that might need more frequent repairs, and are likely out of warranty, which could cost you more in surprise expenses.
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Fuel Efficiency and Technology: Newer cars, particularly hybrids and electric vehicles, “might offer long-term fuel savings and advanced safety features, offsetting their higher initial cost,” ChatGPT wrote.
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Economic Conditions: First, ChatGPT warned me to make sure I consider my own economic situation, such as job security and my overall financial stability. Then, it suggested I consider “inflation trends” and pointed out that “opting for the less expensive used car might reduce financial stress.”
How Tariffs Are Affecting the Auto Market
ChatGPT also mentioned how tariffs will also impact the cost of cars, citing that major car companies, like General Motors, are projecting billions of dollars in increased costs to make cars from tariffs alone, which will surely be passed on to consumers. Ford Motors also expects vehicle prices to rise in the latter half of 2025, as a result.
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New Car Prices: The end result of this is that “the added costs from tariffs are making new cars more expensive, which may push more buyers toward the used car market.”
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Used Car Demand and Prices: The trickle-down effect of more expensive new cars is that demand for used cars increases, as do their prices. “However, they may still offer better value compared to new cars affected by tariffs,” ChatGPT wrote.
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Financing Costs: Finally, since higher interest rates are still making auto loans more expensive, this could affect both new and used car purchases.
When Buying a Used Car Makes Sense
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Your main goal is to reduce debt or monthly payments.
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You have enough savings to handle repairs and maintenance.
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You plan to drive the car until it’s no longer economical to repair, thus “fully capitalizing on its reduced depreciation.”
When a New Car Might Be Better
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If you prefer advanced safety features and fuel-efficient technologies that are available in newer car models.
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You have strong credit, which can get you the best financing deals.
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You intend to keep the vehicle for many years, spreading out depreciation.
The Takeaway?
“In 2025, if you are looking to optimize your personal finances, buying a used car typically remains the better financial choice–provided you carefully select a reliable model, factor in ongoing maintenance costs, and manage financing wisely,” ChatGPT concluded.
Ultimately, each individual will need to weigh their current financial situation and goals.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT Whether or Not I Should Buy a Used Car in 2025, Here’s What It Said
