The debate on whether you should buy a new or used car is one that has raged for years. It is one of those discussions that everyone has an opinion on, and usually, regardless of their point of view, they are partially right. However, over the last two years, securing a vehicle has proved problematic for drivers, who are facing stiff competition and steep prices. The ongoing vehicle supply shortage in Ontario continues to cause a lot of roadblocks for buyers, including fewer options, long waits and higher prices. Depending on where you are in life, your lifestyle, your finances, and your family situation, you may be unsure which option to pursue. Today, we’re going to run down some of the benefits of each to help you decide whether you should buy a new or used car.
Pros of buying a new car
1. Brand new
This should come as no surprise, but a new vehicle is NEW. It will have the latest features, the most up to date design. You can get it in the colour you want, the add-ons you desire, and much more. As a result of it being new, you get to customize it to your lifestyle.
2. Warranty and service
New cars generally do not require much service initially. Warranties can be purchased or extended for an additional cost. Once you buy it, you have little to no worries if any problems pop up. Regular maintenance is also often provided by the dealer for new vehicles.
3. 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 as 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.
4. 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. Newer vehicles across a spectrum of vehicle models and sizes are offering more economic gas usage than what was previously made available.
5. 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. They are designed to help them earn back a tax credit, which can be as high as almost $8,000 in some cases!
Pros of buying a used car
1. The cost is cheaper (in most cases)
The price of a used car is significantly less upfront when you compare that to the price of a new car. 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. Depending on existing mileage, year, recent maintenance and other factors, the price can go down substantially. As a result, it’s technically possible for everyone to buy a used car.
When buying a used car, you should check to see if there are any open recalls. Be sure to research the year, make and model of the vehicle, as you’ll find hundreds of reviews online that can help you make your decision.
They say that the minute you drive a new car off the lot, it depreciates in value by 20% percent. Additionally, after year one, this derease in value can increase to approximately 30%. A used car has already taken that hit, and what you pay is more in line with what the car is actually worth. If you decide to buy a car that’s two or three years old, you’re going to save even more due to the further depreciation of that vehicle. Not only is this great for you as a buyer, but it works out better for you if you decide to sell the vehicle, as the vehicle will retain more of its value.
3. Lower insurance and registration fees
Generally, used cars are less to insure than brand new ones. Registration fees are also often determined based on the price you pay for the car at the time of the initial sale. This typically means these costs will be lower, as well. If you choose a model that is the safest on the roads with a long history of proof, this is especially true. By investing in a car that has a long track record of being safe, you get rewarded by your insurer for making a wise decision. Consider getting a quote from isure before buying a used car to see how much you can potentially save!
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.
So, should you buy a new or used car?
In the end, buying a new or used car should depend mainly on your current and future financial situation. The way we buy and sell cars today is changing. Dealerships are having a difficult time finding inventory, and when they do, there is intense competition in the marketplace. As a result, the price of the few available new and used vehicles are almost, if not exactly, on par. So, how do you decide? If you have a good income and credit score, a new car might be a great investment. Then again, a used car might be more affordable overall.
Either way, it’s best to research and avoid making any quick decisions. Be sure to do your homework and talk to one of our isure representatives about insurance rates for both new and used vehicles to discover which is the best choice for you.