Do you really need a new car?

New-car envy. It can creep up anytime. It may snag you at a stoplight when a muscle car or luxury sedan sidles up. Or maybe when the gleaming SUV parked next to you makes the dents in your jalopy all the more obvious.

Get over it.

It’s all too easy to go for the quick fix and trot down to a dealership with checkbook in hand. That might cure your automotive longing—at least until the payments start. But if you calculate your actual costs, buying a new car might be a lousy financial move.

The car you’re driving right now may be a keeper—dings and all. Here’s why: Cars built in the past decade are more reliable than ever. Although the average age of all cars on the road is 11 years, many newer cars will provide trouble-free service for 200,000 miles or more with care.

If your car is only a few years old, hanging on to it will not only free you from a new cycle of monthly payments but also save a bundle in insurance, taxes, and other expenses­—primarily depreciation.

It may be hard to get your head around the idea that shiny new sheet metal is a depreciating asset, but today’s new cars lose 46 percent of their value, on average, in the first three years.

Historically, a draw for a new car is improved fuel economy. But recent low gasoline prices blunt that impact, and even at higher fuel prices, you need to save a lot of money at the pump to make up for those depreciation and sales-tax hits.

There’s one big downside to all of that: Your current ride probably doesn’t have the latest safety and convenience features, and your warranty has probably expired. And no matter how well your car is treating you, even the most reliable models grow more troublesome as they age, as our subscriber surveys have found.

So should you hang on to your old wheels? It depends on a lot of factors, including the condition of your car and your finances. Think about cost, safety, and connectivity. If your mechanic is spending more time with your car than you do and your repair bills are close to new-car payments, it’s probably time to trade up. Or your car may run well, but rust or collision damage can make it structurally unsound. The only older cars worth keeping are the ones that are reliable and safe.

At a minimum, an older car should have electronic stability control and curtain air bags. Both are lifesavers.

Going with a new car is the best way to get the latest electronic safety gear, such as forward-collision and lane-departure warning systems, as well as features like a blind-spot warning system and a rear backup camera. And only the newest vehicles excel in the latest difficult insurance-industry crash tests.

If you’re looking for the latest electronic convenience and entertainment systems, you’re probably going to want a new car. Some features, such as Bluetooth capability for hands-free calls, can be added to an older car with aftermarket equipment but may lack the integration and ease of use of a factory system. Our look at new-car infotainment systems begins on page 28.

Don’t have the cash for a new car? Buy something almost new. You’ll get some of those desirable new features without spending as much. Just be sure to choose from our list of reliable used cars.

Still can’t make up your mind? Check out our decision tree below.

How much a car with higher mpg will save you

Find the intersection of the fuel economy from your current car with that of the ones you’re considering for potential costs savings per year. For example, If you go from 26 mpg to 34 mpg, you save $239. If you want to trade in for a sportier, less fuel-efficient car, the numbers in red show your added fuel cost.

How much it costs to repair your current car

If your annual repair bills exceed a year’s worth of car payments, then it’s time to start shopping. But even dropping an occasional $1,000 bill to keep an older car running might save you money over buying a new car.

How much value that new car will lose

Cars depreciate significantly over the first few years of ownership, often more rapidly than your monthly payments are paying down the loan—putting you “upside down” financially. The chart below shows typical vehicle depreciation based on the average new-car price.

Every car should have

• Antilock brakes (ABS)

• Electronic stability control (ESC)

• Curtain air bags

Consider these to be safety basics. Don’t have them now? Buy a new or relatively recent car that has all three.

How to be even safer

• Forward-collision warning

• Blind-spot monitoring

• Lane-departure warning

• Backup camera

• A “Good” score in the IIHS small-overlap test

Decision point. Getting a car with most or all of those features will push you toward buying new, especially for nonluxury models. Shop wisely and you can find good late-model used cars that balance features and price. But only the latest designs do well in the difficult small-overlap front crash test from the Insurance Institute for Highway Safety.

Why they’re worth it. Many of today’s high-tech cars work to avoid crashes altogether, warning the driver about hazards and sometimes responding to threats quickly. Advanced systems can automatically slow or completely stop a car. Visibility aids, such as rear cameras and blind-spot monitoring, show what’s around you, helping situational awareness. All things being equal, consider the safest car that you can afford.

Want to listen to custom playlists or Pandora, or use your phone in your car hands-free?

Basics in most new cars

• USB port for plugging in a phone

• Bluetooth phone connectivity

Decision point. Almost every recent car has these as standard. You can install an aftermarket Bluetooth kit in your current car, and various audio-system upgrades can add modern features to older factory systems or replace them entirely.

Specialty items

• Voice commands for selecting audio

• Built-in navigation

• Ability to use integrated apps like Pandora or Spotify

Decision point. Getting those features usually requires an aftermarket addition or buying a new car. Voice commands simplify complicated functions; good systems can reduce distraction. Built-in navigation gives you larger screens than on your phone or a portable navigation device, plus it will automatically adjust stereo volume for instructions.

But it’s not just audio and phone features that distinguish new cars. Even some basic cars now offer fancy stuff, like a heated steering wheel or cooled front seats, which were once exclusive to luxury cars. It sounds frivolous, but once you’ve grasped a heated steering wheel on an icy morning, there’s no going back.

This article also appeared in the April 2015 issue of Consumer Reports magazine.

More from Consumer Reports:
Hits and misses from Consumer Reports’ testing
Best & worst car values
Best new cars for under $25,000

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