Should You Buy a New or Used Car? The Pros & Cons
If you are looking for a new set of wheels this year, there are many decisions that you will have to make. One of which is – will your vehicle actually be ‘new’ or will it be ‘new to you’? Here are some pros and cons you can examine as you decide on the better option for you
Why you should buy a new car
A number of people like to buy a new car – and for good reason. There are many advantages of stepping into a new set of wheels that go way beyond the new car smell. At the same time, it’s important to understand some of the advantages of this decision as well as some of the drawbacks.
1. Enhanced safety
A popular reason for buying a new car is that newer cars come with new and improved safety features. The advanced computer technology available in newer models is enhancing safety, as well the ease of driving. Therefore, if you opt for the newest model possible, you are likely to benefit from features such as rear-view cameras, blind-spot and lane monitoring systems, and stability control which are simply unavailable in older models.
2. Better fuel efficiency
In terms of how much you are likely to spend on gas each month – this amount can add up over time. If your vehicle has improved fuel efficiency, this can help you save money. While many smaller models have been offering drivers this advantage for many years now – other larger vehicles have not. This, however, appears to be changing and newer vehicles across a spectrum of vehicle models and sizes are also offering more economic gas usage than what was previously made available.
3. Government incentives
Another reason that may help sway your decision to buy a new car over a used one is the existence of incentives offered by the government. More specifically, various provincial governments have initiated rebate programs for drivers who purchase an electric vehicle, or other environmentally-friendly vehicles such as plug-in hybrid models. These rebate amounts, as well as the availability of the program itself, are eligible to many Canadian car buyers and are designed to help them earn back a tax credit which can be as high as almost $8,000 in some cases.
Why you should buy a used car
Buying a used car is a great option for a number of Canadians, providing a lower cost alternative over the long run. Even with a used car, there are often opportunities to get reasonable rates of financing so you can spread the payments of this big purchase but still take advantage of a lower cost vehicle since it’s used.
1. Save money on the sticker price
One of the main reasons that individuals often decide to buy a used vehicle over a new one, is to save money off the upfront cost of the vehicle. If you decide to purchase a vehicle even one year old, you have the potential to save quite a lot! As a driver, if you are trying to save money and stick to a specific budget, this can be an effective method of securing that well-needed vehicle, yet not having to overspend.
If you are worried that going with a vehicle that is a few years old won’t provide enough safety and won’t remain in good condition for very long – it is important to keep in mind that cars these days are built well and last a long time. This reality should provide some added peace of mind to you as a driver, and the used vehicle you purchase can still enable safe driving conditions.
2. Slower depreciation
A brand new vehicle is said to depreciate in value by 20% from the moment it is driven off the car lot. Additionally, after year one this value can increase to approximately 30%. To put this into perspective – if you have purchased a new vehicle for $30,000 – then after one year of driving, this vehicle is likely to have depreciated by $9,000. If instead you decide to buy a 1 year old vehicle, as the owner of that vehicle, you can minimize the amount of depreciation it will in cur.
3. Lower insurance & registration fees
One final aspect that might just settle the decision of ‘used vs new’ is the fact that when buying a used vehicle you can expect to pay reduced insurance costs and in turn, the registration fees will also be lower. Since the value of the car is the major factor for assessing the amount you will have to pay for car insurance – buying a used car at a lesser price will also translate into lower insurance expenses. Since registration fees are also often determined based on the price you pay for the car at the time of the initial sale, this typically also means these costs will be lower as well. All in all, buying a used car, sold at a lower value means you will also be able to save a fair bit of money on these types of vehicle expenses, which typically drive up the total costs associated with car ownership.
Enjoy the best of both worlds
If you’re in the market for a new (or newer) car, don't forget about a certified pre-owned (CPO) car. A CPO vehicle is not as expensive as a brand new car and tends to be more reliable than most used cars found in the private market.
With Canada Drives you can get pre-approved for your next car loan online so you can shop with confidence knowing exactly what you can afford. You will even get connected with a local dealer in your area that will show you a selection of cars you already qualify for!
