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Is buying a new car greener than buying used?

About a year ago I was at a conference where the keynote speaker dispensed the conventional wisdom that buying a used car is more environmentally friendly than buying a new one, even something like a hybrid.

Photo from Hugo90 on Flickr.

Seems like a no-brainer, right? Manufacturing a new car requires enormous mining, manufacturing, transportation and other costs and energy inputs, while a used car doesn't need to be manufactured; it already is.

You can find articles agreeing in Wired, Knol, Scientific American, BrakeandFrontEnd Blog and many other places.

If you are worried only about your own personal environmental footprint, then the used car is likely better. But if you are concerned about the entire planet, you have to draw a larger circle than just around yourself, and that changes the answer.

When one goes to purchase their replacement vehicle, what happens to the one they already have? In most cases it is sold to someone else, who eventually sells it to someone else until it finally completely dies after about 17 years and several owners.

In fact, every car that is manufactured will be on the road until it finally is totaled or gives up the ghost. Your particular ownership of that car is just a waypoint on the path from manufacturer to junkyard.

A better outcome, from an environmentalist's standpoint, is for manufacturers to start churning out more and more high mileage and hybrid cars and working desperately to design and build the next, even better generation of vehicles.

The way to get the manufacturers on board is to affect demand. Car builders claim over and over that they manufacture to meet the demand of buyers—it's why GM claimed it was building so many SUVs, for instance.

Manufacturers don't care about used-car buyers, even if demand for used cars sends a weak signal. If I buy a new, cutting edge, fuel-efficient vehicle, then I'm sending a signal to the manufacturer to make more of those. If I buy a used car, I'm not sending any signal, but someone buying a gas-guzzler might be.

Buying a used car neither reduces the total number of manufactured cars nor the number of cars going to the junkyard: remember, each owner is just a way station along the car's trip.

Another way to look at the argument is to scale it up. Thought experiment: a fleet buyer is buying 100,000 vehicles. Imagine the difference between placing an order for 100,000 new hybrids vs. buying 100,000 used cars. Which is going to make the manufacturers sit up and take notice—and maybe even invest in new factories?

In fact, what if that fleet owner put in an order for 100,000 every year? There's an interesting twist. Counterintuitively, by making that argument writ small we learn that buying a new efficient car every year is better than buying one and making it last. And it's true (although not practical for most people). It would send an even stronger economic signal to manufacturers.

In the end, the decision about replacing your car includes a lot of factors, not the least of which is your own personal financial situation. But if you're thinking about a new car, but have considered a used car for environmental reasons, think again.

Incidentally, Slate did a comparison that also comes out in favor of the new Prius even without invoking my macroeconomic and macro-environmental arguments.

Steve Offutt has been working at the confluence of business and environment for almost 20 years, with experience in climate change solutions, green building, business-government partnerships, transportation demand management, and more. He lives in Arlington with his wife and two children and is a cyclist, pedestrian, transit rider and driver. 


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I'm not sure I quite follow your logic. Like you mentioned, cars are passed along until they are totaled or give up the ghost (and in both cases, are often stripped of usable parts before being sent to the crusher).

However, by buying a used car, you're taking one car off of the market, and out of circulation. This, in turn, slightly drives up the cost of used cars, making the new car a more attractive deal.

If you buy a used Prius, it *does* send a signal to Toyota that their cars are attractive on the used market. This is a big deal to them, because they can (and already do) advertise this fact, and they may choose to push efficient cars more heavily to lessees and on fleet sales, where cars are often returned to the manufacturer for resale after a few years.

by andrew on Sep 24, 2010 1:48 pm • linkreport

Andew makes a fair point, which is companies do care about used car values. Some more than others, but boosting the used car value lowers to residuals on new car leases. As a result, almost every premium brand is doing some sort of CPO program.

Really, while I appreciate the counter-intuitive point here, I walk away somewhat confused. So, I should lease hybrids? Or "less-polluting" cars, which I think you mean more efficient ones.

Creating a program for a mild subsidy of a low-use high-efficiency lease (say 6000K miles a year) would create some incentives.

Conversely, programs like the Va car tax make you want to keep older cars on the road to avoid tax. Again, some sort of push/pull might work: move the tax around so the first 20,000 of value is NOT taxed for high-efficency cars, and credit a larger decal fee for larger older engines.

by charlie on Sep 24, 2010 2:03 pm • linkreport

If you want people to not use a lot of gas, just tax the gas.

by Michael Perkins on Sep 24, 2010 2:20 pm • linkreport

"In fact, what if that fleet owner put in an order for 100,000 every year? There's an interesting twist. Counterintuitively, by making that argument writ small we learn that buying a new efficient car every year is better than buying one and making it last. And it's true (although not practical for most people). It would send an even stronger economic signal to manufacturers."

I'm not buying this. If everyone bought a new more efficient car every year for sure it would make the entire vehicle fleet more efficient. BUT wouldn't you be junking the entire fleet of cars every year? Wouldn't that be a huge environmental waste?

by MLD on Sep 24, 2010 2:22 pm • linkreport

The gigantic hole in this argument is the unfounded assumption that cars will remain on the road for roughly 17 years regardless of the relative demand for used vs. new cars. If people stopped buying used cars in favor of new ones there would be less incentive to keep older cars on the road and they would be scrapped sooner.

by jimble on Sep 24, 2010 2:33 pm • linkreport

Love the blog and follow it regularly, but rarely weigh in. My day job is as a press secretary at the Union of Concerned Scientists' DC office. Our vehicles engineers always tell interested members that the great bulk of emissions produced by a car over its lifetime come from burning gas. I like to ask people to picture the thousands of gallons of gas an average car consumes and lighting it all up at once. What if you could reduce that giant gas pile by 10 or 20 percent with a new car? Kind of puts it in perspective.

While the environmentally-best answer might be different for people based on the cars they're dealing with and how many miles they drive, a good rule of thumb is that if you can secure a significant MPG jump with a new car, it's much better for the environment. You also have to account for the fact that there's usually no way for you as a consumer to know where you old car will wind up and what kind of car it is displacing. However, newer cars tend to be more efficient than older ones, in the broadest possible perspective.

by Aaron Huertas on Sep 24, 2010 2:33 pm • linkreport

It's entirely possible to buy a certified used hybrid.

Just saying.

by J.D. Hammond on Sep 24, 2010 2:35 pm • linkreport

I just went from a fairly inefficient late-90s minivan to a 30+ mpg '05 Scion. I don't regret this decision at all. My mpg is pretty close to double what it used to be. I couldn't afford a new car without leasing, so it is what it is. Most buyers, and therefore most companies, do care about resale value.

by Nate on Sep 24, 2010 2:43 pm • linkreport

Your premises are faulty. Manufacturers DO consider the used market indirectly. The carÂ’s resale value impacts its initial sale price. Longer lasting, reliable vehicles fetch a higher price than short-lived ones. Moreover, the market signal ALREADY encourages manufacturers to make cheaper, more fuel efficient cars. No additional incentive is really necessary. But what is even better for us over the long run is reducing the number of cars we need to make. Part of that means ensuring that the cars on the road last as long as possible (and average turnover time for a generation of vehicles is about 10 years, not 17) so you donÂ’t need to mine additional bitumen and iron and produce additional plastics and, in the case of hybrid/electrics, extract additional nickel and lithium.

by PJ on Sep 24, 2010 2:44 pm • linkreport

@Aaron Huertas:This is a sad consequence of climate change and carbon fixation dominating the entire conversation about environmental issues. The environmental cost of a car is not restricted solely to its emissions. You know what destroys a natural habitat faster and more brutally than a 2 degree change in temperature? Mining operations. In addition to the direct destruction of felling trees and blasting/drilling the holes into the ground, there is the industrial slurry and sludge that's left over as well as the toxic chemicals that get left behind. ItÂ’s necessary, but it isnÂ’t pretty and it's not something that should be ignored because our culture and our politics is myopically fixated on carbon emissions as the only environmental cost worth factoring.

by PJ on Sep 24, 2010 2:52 pm • linkreport

@PJ: That's a good point a reason recycling scrapped cars is important. I would add, though, that improving car and truck technology isn't just about carbon -- it reduces smog, NOx and a host of other pollutants in addition to reducing overall oil dependence.

by Aaron Huertas on Sep 24, 2010 2:56 pm • linkreport

Over the long run smog, NOX, and oil dependence will be addressed by current trends anyway though. Current trends won't address our cultural penchant for new-and-shiny over tried-and-true though.

by PJ on Sep 24, 2010 3:06 pm • linkreport

I haven't fully thought through this argument, but let me throw it out there anyway:

If you lease a new car, your payment depends on the residual value at the end of the lease, which is essentially linked to the resale value of that car on the used market. A higher residual value = lower lease payments = more attractive to the lease customer.

On top of that, I believe (but I'm not that familiar with how leases are structured in the US), that the manufacturer is guaranteeing the residual value. So they basically agree at the time the lease is written to take the car off the dealer's hands for $X (where $X is the residual value).

If the market value is less than the residual value at the time the lease ends, the manufacturer loses money. I believe this happened a few years ago when gas prices spiked and no one wanted to buy a used gas-guzzling SUV, so the resale market tanked.

So, based on this, wouldn't the manufacturer want a high resale value?

Like I said, I haven't fully through this through. It could be that in the US market, few cars are leased (instead they are financed) so this is not a big factor.

by Justin on Sep 24, 2010 3:11 pm • linkreport

I have a question. If manufacturers make increasingly long lasting cars, won't that eventually cause them to lose money, because they are not selling as many units per year? It seems to me that an optimal car (clean, long lasting, safe, etc.) will never be made, because there will not be enough demand for new ones, unless, as was stated above, everyone purchases a new car every year.

by David T on Sep 24, 2010 3:22 pm • linkreport

"A better outcome, from an environmentalist's standpoint, is for manufacturers to start churning out more and more high mileage and hybrid cars and working desperately to design and build the next, even better generation of vehicles."

This is where your argument falls apart. A truly better outcome, from an environmentalist's standpoint, is for manufacturers to start churning out fewer and fewer cars, as mass transit becomes increasingly available and convenient.

by tom veil on Sep 24, 2010 3:48 pm • linkreport

Buying a used car neither reduces the total number of manufactured cars nor the number of cars going to the junkyard: remember, each owner is just a way station along the car's trip.
Flawed logic. Suppose you are that last owner who will take the car to the junkyard?

Furthermore, what happened to the environmental mantra of "reduce, reuse, recycle"? Buying a used car fulfills all three:
Reduce: not buying a new car keeps the total number of cars from increasing, and by hastening the used car's demise you contribute to reducing the overall number of cars.
Reuse: I don't think I need to explain this one
Recycle: at the end of a car's lifecycle most of it's materials are recyclable including the metal, plastics, and glass.

by Smoke_Jaguar4 on Sep 24, 2010 4:15 pm • linkreport

I've been slogging through a lot of essays recently, so I apologize if this is a bit harsh:
I think this is a weak post because the arguments here are so vague you could conclude anything. "These forcing factors on the left side of the current equilibrium exist that are beginning to form a conventional wisdom on the best path... but there are also forcing factors on the right side of the equilibrium! So the optimal equilibrium position is all the way left." No attempt at quantification, no specific arguments, just observations of the process, which leads to a non sequiter conclusion.

When a society makes an equilibrium economic decision based on its average costs and benefits, you don't change behavior by pointing out that there are costs, or that there are benefits. The median person has already considered them, or (often) they are not involved enough in your philosophy to consider them the way you do. You have to actually change the costs or the benefits or both.

by Squalish on Sep 25, 2010 11:12 am • linkreport

I'm not sure that I agree with the theory that buying a new green item helps as much as buying a used item. For example, the energy that goes into making a crappy car is about the same as a good car. If you weaken the used car market, you decrease the incentive for manufacturers to invest in the quality control, training etc that is required to make a good new car that will last, and have real value in the after-market. There is nothing green about that.

by SJE on Sep 25, 2010 9:21 pm • linkreport

By this logic you should buy a new car every day.

by Bill on Sep 30, 2010 2:15 pm • linkreport

Hi all. Thanks for your comments and thoughts. Here are some follow up thoughts.

@tom veil - I totally agree. The best outcome would be to get rid of the cars altogether. That said, though, I stand by my point that if one is choosing to make that purchase, then more influence is exerted on the manufacturers by buying a new one than a used one.

@Bill - Correct. Absurd in reality, but correct in theory. Buying 365 of the greenest cars available every year (and then selling them) would have a stronger environmental influence on the manufacturers than buying 1.

Which brings us to @MLD. Yes, there would be a point at which the logic breaks down, although it's probably higher than 100,000 per year.

Lastly, to several. Agreed that the used-car market has influence on manufacturers. But not nearly as much as what the new car buyers are buying, which was my point. That's what manufacturers are most interested in, so that's why inserting yourself at that point in the process has more environmental impact than lower down the chain.

@Smoke_Jaguar4 Not flawed at all. You just happen to be the last one on the chain. In that case, it's even more important to influence the new-car market, because there is only a single transaction rather than two.

(@squalish - If I understood a single word of what you said, I'm sure I would agree or disagree with it.. . I think.)

Thanks again, all, for your input. Now get out there and ride your bikes!

by Steve O on Sep 30, 2010 5:42 pm • linkreport

Maybe outside the focus of this topic, but speaking from personal experience it is also entirely possible to buy a 25-year-old used car for $300 that gets 45mpg. Reduce, then reuse, and then recycle!

This post also ignores the financial folly of purchasing a brand-new car. Again, slightly off-topic, but I think relevant.

by Matthias on Oct 4, 2010 11:14 am • linkreport

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