Buying new lets you buy ‘your’ car
New or used?
It’s the first question you must ask when thinking about new wheels.
The most obvious reason for buying used: it’s cheaper.
The biggest cost element in your automobile budget isn’t gasoline, maintenance, or repairs. It’s depreciation. A new car can lose a doubledigit percentage of its value the minute you drive it off the lot. Its value as a transportation device drops much more slowly than its resale value.
So if pure kilometres-per-dollar is your prime criterion, used is the way to go. Now, there are obvious pitfalls.
First and foremost: are you buying someone else’s nightmare?
If you buy used from a franchised new car dealer or a reputable used car dealer — yes, there are such things — you may get some sort of warranty, but it won’t be anywhere near as extensive as what a new car would have. Buy privately and you’re on your own. You might be able to get a prospective purchase checked by a mechanic, but there’s no guarantee he or she will catch everything.
Shopping for a used car is also a pain. You might spend a month chasing down leads, trying to find something that will satisfy your needs and suit your budget.
On the other hand, there are lots of reasons to buy a new car. You get exactly the trim level, options, powertrain and colour you want. You get the latest and greatest in technology and safety features. You get a full factory warranty, which brings protection against major financial loss.
Most important: you get some peace of mind.
Plus, there’s a whole host of psychological reasons, including driving a car that expresses your personality, and the undeniable thrill of being the first person (OK, except assembly line workers and lot “boys”) to drive it. It is also easier to shop new.
Pretty much exactly the same car is available at any franchised dealership for that brand.
You might spend hours, days, running from one store to another trying to save a couple hundred bucks.
Probably in vain: those dealers all get their cars from the same place and have very similar expenses.
Also, you might participate in a new-car transaction once every four or five years. These people do hundreds of deals a month. Think you can play their game better than they can? Good luck with that.
There are also many more finance options when buying new.
Banks are much more likely to advance funding for a new car than for a used one. Leasing may not be as significant as it once was, and you should always look carefully at both the short- and longer-term aspects of this option, which really deserves an entire article of its own here.
Incentives are also a part of the automotive retail landscape these days. Cash back. Low — even zero — interest rates. Even on strong brand names which never used to have to resort to such things.
Sometimes, “money on the hood” can make a new car a better buy than a late-model used one. So, no easy answers. All we suggest here is that you ask all the right questions, which is where my colleague, Mark Richardson, comes in elsewhere on this page.