Looking for a new car? You might be pondering, "Do I really need a brand-new vehicle, or would a nearly new car work just as well?"

The appeal of a new car is obvious, but so is the savings that come with buying a slightly used vehicle. Here's how choosing a "nearly new" car could save you thousands.

What's the Difference: New vs. Nearly New?

Before diving into the comparison, let's define "nearly new." A brand-new car is a model that has never been titled, typically with very few miles on the odometer. A nearly new car, however, is a used vehicle from the previous model year, still in excellent condition and possibly only a few months old.

But be careful: the term "nearly new" can be a bit blurry. If the model you're looking at is from an older generation, the advantages of buying "nearly new" start to diminish. In these cases, the brand-new car may feature improved technology, better performance, and an updated design, leaving the older model behind.

Depreciation: The Hidden Cost of New Cars

We've all heard it: the moment you drive a new car off the lot, its value starts to plummet. Depreciation is one of the biggest costs of owning a car, especially in the first few years. In fact, it's often the single largest expense you face as a new car owner.

Here's the good news: to a savvy car shopper, that rapid depreciation is a chance to save big. For example, back in 2018, a brand-new base model BMW 330i was priced around $41,000. But if you chose to buy a one-year-old 2017 BMW 330i instead, you could expect to pay just $35,000 for nearly the same vehicle—saving you a neat $6,000.

This isn't just a luxury car phenomenon. Depreciation affects all vehicles, even affordable models like the Honda Civic. In 2018, a brand-new Honda Civic EX cost around $23,500. However, a nearly new 2017 Civic EX, with roughly 12,000 miles on the clock, could be found for just $21,500—saving you about $2,000.

Big Savings on Expensive Vehicles

While saving $2,000 on a Honda Civic might not seem like a huge deal, the savings become more significant when you're looking at more expensive vehicles. Take the Chevrolet Tahoe LT, for instance. In 2018, the price of a brand-new four-wheel-drive Tahoe was around $56,500. But a certified pre-owned 2017 Tahoe could be found for about $51,500, offering you a $5,000 discount on an almost identical vehicle.

As you can see, the savings are even more pronounced in higher-priced cars. The price difference can be a lot more substantial, especially when the vehicle in question is still under warranty, making the nearly new option a fantastic value.

Trade-in Concerns

While buying nearly new offers a lot of advantages, there is one thing to keep in mind: the vehicle you're buying will be one model year older than the brand-new car you're considering. This may affect the trade-in value when it comes time to sell the car. However, the longer you keep the vehicle, the less this becomes an issue.

Is "Nearly New" Right for You?

Buying a nearly new car isn't for everyone. If you prefer the scent of a new car and the peace of mind that comes with having a completely untouched vehicle, then go ahead and buy new. However, if you're looking to save several thousand dollars while still driving a nearly identical car, opting for nearly new could be the perfect choice for you.

As much as I love new cars, having a "new-to-me" vehicle and keeping a significant chunk of money in the bank doesn't sound too bad either. Just remember to do your research and shop around, and you'll find that nearly new might just be the smartest financial move you can make.