Used vs. New Car: Buy Used, Keep It Longer, Invest the Rest

I bought my 2016 Toyota Camry used almost nine years ago for about $16,000. It still runs smoothly, and I plan to drive it until it stops being reliable.

Repeat that one decision for a driving lifetime, used instead of new and two more years per car, and the invested difference could be worth about $2.06 million by age 70. That is about $471,000 in today’s purchasing power.

Source note: 2026 average prices ($50,089 new from Kelley Blue Book, $32,651 three-year-old used from iSeeCars), car prices rising 3% a year, a 7% annual investment return with no tax on the gains, and purchase price only; the full assumptions are at the end.

Cars repeat. Original owners keep a new car for 8.4 years on average, so buying from age 20 to 70 means about six of them.¹ At today’s average price, rising 3% a year, those six purchases add up to about $611,000 before financing or any other cost of ownership.

So I modeled two changes over those 50 years, buying used every time and keeping each car about two years longer, with every dollar not spent on a car invested at 7% a year.

Used vs. new car: the price gap right now

Most dealer sales are already used. Cox Automotive expects roughly 20.5 million used and 13.1 million new retail vehicle sales in 2026, about 61% used.²

A three-year-old used car costs about 35% less than a new one at today’s averages, a $17,438 gap on one purchase. (Kelley Blue Book and Cox Automotive,³ iSeeCars⁴) Invested at 7% for 50 years, that first gap alone grows to about $514,000.

Extend the car’s life by two years, if it is reliable

Cars are already staying on the road much longer. Bureau of Transportation Statistics data puts the average age of U.S. light vehicles at 8.4 years in 1995 and 11.9 years in 2020. S&P Global Mobility says it reached 12.8 years in 2025. (Bureau of Transportation Statistics,⁵ S&P Global Mobility⁶)

That does not make every car a keeper, but it makes two extra years plausible for a well-maintained, dependable one. I follow this rule myself with the Camry from the top of this essay.

Two extra years per car, 10.4 years instead of 8.4, turns six cars in 50 years into five. That’s one whole car you never buy.

What 50 years of car buying looks like

The baseline is six new cars between ages 20 and 70, compared with three alternatives.

Each option is compared directly with the complete six-new-car purchase schedule. The amount saved across each alternative schedule is invested as those savings occur.

The five-car rows already include the car never bought; nothing is added afterward.

The five-used-car row combines both changes and produces the strongest result, almost $1 million by 60. The earliest savings have the most time to compound, which is why the invested balance grows far beyond the purchase dollars not spent.

Buying used does more of the work because it saves at every purchase, starting with the first one. Keeping each car longer adds one purchase that never happens.

Run it with your own numbers

Most 20-year-olds aren’t shopping for a $50,000 car, and you may not have 50 years ahead of you. The math works with any two prices.

Try your numbers

What could one car’s price difference become?

Enter the prices you are comparing and adjust your expected return.

New-car price $ Used-car price $ Annual return %

Investing the

$10,000

difference could grow to:

Years invested	Potential value
10 years	$19,672
20 years	$38,697
30 years	$76,123
40 years	$149,745

One purchase only. This does not model later car purchases or future car-price inflation.

This only works if the difference actually lands in an investment account. If it quietly turns into a nicer vacation, there’s nothing to compound. The same condition shaped my rent-versus-buy decision: spending less only builds wealth when the difference stays invested.

What I recommend

Buy a reliable used car that fits your budget and spending plan. Check its service history and pay for an independent inspection before you buy. Then maintain it, and keep it until reliability, safety, or a real change in what you need tells you it’s time.

Before replacing a car that still works, I ask one question: what will the next car let me do that this one can’t?

Sometimes that answer will justify a new car. Until then, the next purchase can wait.