As a general rule of thumb, a late-model used car is simply less expensive to buy than the new version of the same make and model. It’s already sustained a good chunk of its depreciation cost (the second it was driven off the lot) and unless the vehicle was driven across the country and back ten times, it likely won’t have gotten to the point that substantial maintenance and repairs are needed.

That being said, there are extenuating circumstances. When the stars align, under certain conditions, you may want to consider buying a new car over a used car. Here is one example - and a true one at that. So you’ve been to the pump and have seen that gas prices are very high. Smaller, more fuel-efficient cars are in greater demand. You happen to be searching for a car that holds its value well, and that desire has only increased since fuel costs started rocketing skyward. As a result, the used car inventory is low and the asking price high. On top of this, it’s near the end of the month (or the year) and the manufacturer is offering discount financing or a large rebate on the new car. Once you run the numbers, you may find that the new car will cost you not that much more than a used version. What's more, given that used cars already have some amount of mileage, the monetary difference is much smaller than you thought.

On the other hand, look at the above scenario from the opposite perspective. You’ve been waiting to purchase that full-size SUV you want. With gas prices up, discounts on new inventory are up as well, and used vehicle selection is plentiful. Demand is down and an opportunity to get a good deal is much better than it was a few months ago.

Regardless of what you ultimately choose to do, here is what you should consider before deciding whether new or used is right for you:

• Is the vehicle you're buying in high demand? Is there sufficient inventory of used vehicles compared to the new car, so that you have a range of inventory options to consider?
• Are only the higher-end trims available as used cars? Would it save you money to order a lower-end base model from the manufacturer?
• What are the new and used interest rates that you qualify for? While they typically differ by only one to two percent, available discount financing incentives for new cars can dramatically change your payments as well as the bigger picture.
• Have there been significant changes to the vehicle for the new model year, such that it makes it worth it to buy new over used?
• Was there a price increase for the new model year?
• Are you shopping for a vehicle that tends to hold its value very well, making the used vehicle nearly as costly as the new? Is the difference significant or negligible?
• Are there certain other market conditions that have caused a temporary shortage of the vehicle, thus driving up demand and causing pricing increases? This may include gas prices, a pending model changeover, production shortages or other global economic factors.
• Is the used car warranty transferrable? How many miles are on the used car and how long are you covered for maintenance and repair expenses that you may incur in addition to the car payment?
• Is the vehicle being discontinued? Is this your last chance?

All in all, doing your research can pay big dividends in the end. Informed consumers will save money either way.