When Is a New Car Considered Used?

The automobile industry can often be confusing to navigate. Many consumers are unaware of the nuances between a used car and a new vehicle with used features. Whether you’re looking for a pre-owned vehicle, a brand-new set of wheels, or just plain curious, understanding your options can help you find the perfect car for your needs.

A new car is considered used if registered with a previous owner, according to the Department of Motor Vehicles (DMV). Additionally, a new car is deemed used within the automobile industry if it has clocked up more than 200 miles on the odometer.

The rest of this article will explain a few topics related to this issue more in-depth, including when a new car is considered used and why you should reconsider the odometer as a definitive guide to new cars.

A New Car Is Considered Used if It Has Been Previously Registered

According to the source and purpose of the previous statement, a new car can be defined by several characteristics. Some argue that the number of miles on the odometer determines whether a vehicle is used. Others will say the most important element to consider is whether a newer model has been released. As a matter of fact, a new car doesn’t necessarily mean it’s being driven for the first time.

Instead, new cars are determined by whether or not they have been sold and titled before. As noted by the Department of Motor Vehicles (DMV), once a vehicle is purchased, financed, and the paperwork is signed and remitted over to your district, it is no longer considered new.

New Cars Can Still Have Some Mileage

Imagine you’re buying a new car, the paperwork is almost complete with the dealership, and you take one last glance at the shiny interior when you notice the odometer reads 4000 miles! The dealership told you it was a new car since it hadn’t been registered before. How is this possible?

The so-called demonstrator or demo cars are vehicles that dealerships have previously used as display models in their showrooms. They were likely driven by potential customers or dealership staff on test drives.

The vehicles could have a few thousand miles on them but have never been registered, so legally, they’re considered new.

A dealership may attempt to sell buyers a demonstrator vehicle claiming that it is an immaculately maintained vehicle and that the buyer will get a better deal with this car than with a new one.

However, that’s not always true. Since demo cars are legally new, they often have considerable mileage and can show signs of wear and tear that aren’t immediately apparent.

For example, if a dealership has a car on the lot, doesn’t sell it for three years, and occasionally tests it out to the point that it has 6000 miles on the odometer, technically, it is still a new vehicle. In contrast, a car with zero miles on the odometer, titled in your name and towed to your home, is considered used.

With this in mind, is a new car still considered new after clocking up 10,000 miles? Not quite.

After How Many Miles Is a New Car Considered Used?

Once a new vehicle exceeds 200 miles, it is considered used. These additional miles come from the dealership or mechanics who transport, set up, and maintain new vehicles before selling them to consumers. However, new cars should not have more than 200 miles on their odometers.

When this happens, customers buying the vehicle have the right to request a discount or a different vehicle with lower mileage from the dealership. Occasionally, car dealerships will offer buyers a discount of 3-5% if a consumer is savvy enough to haggle on the mileage they think is excessive on a new car.

It’s ultimately up to you what mileage you prefer for a new car to be. If you are set on a particular vehicle and are comfortable with the price, no law specifies that a car dealership must offer a discount to you. The number of miles you think is too many for a new car largely depends on your preferences and car price.

What’s the Difference Between a New and a Used Car?

The main difference between new and used cars is the cost. Although used vehicles are less expensive, they may require more maintenance due to their less reliable performance. New cars will be cheaper to operate, whereas used ones will have lower insurance premiums.

Used CarsNew Cars
Low car insurance premiumHigh car insurance premium
High maintenance costLow maintenance cost
Affordable priceExpensive
Low depreciation rateHigh depreciation rate
Lacks new features and safety technologyLatest technology and features
No warranty coverageWarranty coverage
Limited selectionLatest models
May not be reliableBetter reliability
Less depreciationFast depreciation

According to research, a new car is the second most sought-after consumer purchase after a brand new home. While the appeal of a brand spanking new car is enough to make most people fork out on one, the choice depends on whether you can afford one or not.

Nonetheless, used cars can offer just as much reliability as a new model, plus the added bonus of a cheaper price tag. Essentially, buying a car is a matter of personal preference, and it’s always best to consider quality and long-term investment prospects, if possible.

Should I Buy a New or Used Car?

You should buy a used car if you’re on a tighter budget and don’t mind not having access to the latest features. Meanwhile, new cars offer a lot of benefits when it comes to the car’s general condition, features, and driving feel. As the first owner, you’re also covered by a guarantee.

Consider the Cost

You should consider a vehicle’s up-front and long-term costs when deciding whether to purchase a new or used model. You may spend less on repairs for the first few years of owning a new car.

Moreover, you’re likely ready to trade in the vehicle when it starts needing significant repairs and upkeep. If you pay cash for a used car, you will also save on interest charge.

Therefore, when comparing the cost of a new car with a used car, consider all the variables involved. A used or new car may come with the following expenses:

  • Interior and exterior repairs
  • Upfront cost
  • Car insurance
  • Buying fees
  • Maintenance
  • Fuel cost

Depreciation is the most persuasive reason to buy a near-new used car over a brand-new one. New cars will depreciate in value by 10% as soon as you bring them home. Therefore, buying a newer second-hand vehicle can save you a lot of money in the long run.

Consider the Reasons

Online platforms have changed second-hand car sales in the US. By researching used car prices online and setting a budget beforehand, buyers can put aside concerns over overpriced or poorly maintained cars.

And while there are many reasons why people choose new cars today, there are some top-notch options if you’re on a budget, want a cheaper option, or simply wish to buy a discontinued model.

Here are some reasons to not get a new car:

  • You may be buying the first car for a relative
  • The engine of a new car needs to be broken in. Over time, if not treated properly, the results could be unfavorable
  • You’re a learner driver
  • You may be unsure of your preferred driving style. Buying a new car is a significant investment, so it’s best to test out some different models first

You can save a lot of money by buying a used car. However, remember that someone else was responsible for its maintenance and servicing. And there is still no way to determine a car’s reliability or health based solely on its age.

In most cases, you’ll never get the complete picture without expert assistance when buying a car. So, before purchasing a used or new car, make sure you have the car’s history thoroughly reviewed by a dealership you trust.

Financial motives may prove to be an unnecessary precaution when deciding whether to purchase a new or used vehicle. While used cars are usually cheaper, you may not find everything you want unless you’re in a hurry to buy. Consider both options if you’re not in a hurry to purchase and choose the one you prefer based on your finances and lifestyle.


There are a lot of misconceptions about what constitutes a used car. It is true that used vehicles have been driven, which can affect their performance and safety. However, don’t assume that new cars won’t be driven by the time they get to you.

When you buy a new car, it’s essential to understand precisely what makes a vehicle new versus used. A few factors determine if a car is new or used, including how recently it has been registered and how many miles it has on its odometer.

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