New or used, that is the question. Actually, the questions should be: how much money do you have? How's your credit? Trading in or starting from scratch? Employed? Answers to these questions have a direct impact on the first, or original question.
How much money do you have for a down payment on a car? If the answer here is a couple hundred bucks or so, then used goes to the top of the list. Buying used isn't despite what some will have you believe a negative mark on your soul. Most dealerships have quality used cars that are well maintained and in excellent condition; the car's only reason for being back on the lot is that it is a model year or two (or three) out of date and keeping up appearances mandated that it get traded in. On the other hand, if you' re looking at that suspect Buy here, Pay here lot, you might be in for some nightmares.
Your credit score is going to factor in when that loan approval process starts. If you're looking to drive that fresh off the factory floor Audi with all the bells and whistles sporting a 550 credit score, save yourself the time and don't. Spotless credit, or credit hovering around 700 or above you can get away with a decent loan at a decent interest rate on buying new. The further away from 700 you get, the higher the interest and the more likely you want to look at used.
Trading in your current car will give you a few hundred to a few thousand off your final price (depending on what it is you're trading in) and everyone knows that car dealers are the most honest people in the world, so check out what Kelly Blue Book puts your trade in value at before you walk into the lion's den. No trade in? Revert back to the first two points.
Employment is going to be a factor. Fresh out of college, brand new job, looking to make your mark, pulling in 30 +/- grand a year? Go used. The economy, while getting better, is a fickle beast and it has no qualms about turning on you in a heartbeat. Established and your financial life is in order and points one and two are well in hand? Treat yourself. Go new. Working full/part time at a minimum wage job tossing burgers or clearing tables? Look for used. This is not a slight on those jobs; your disposable income to devote to a car payment just isn't that great. The lender who is going to give you a thumbs or down on your loan is going to be taking this into consideration and it will be a deciding factor.
There is nothing wrong with buying used it's actually, in many cases, a smarter financial move than buying new but do some homework. Figure out what you have going in and what you can afford driving out with. Having that shiny new BMW in the driveway is great, until it's repossessed a month later.