New Vs. Used Cars In Ontario: What's The Smarter Option?
New Vs. Used Cars In Ontario: What's The Smarter Option?
Posted on January 14, 2024
One key decision you have to make when thinking of buying a new car is whether to buy a new car or a used one. There is a lot that goes into the decision including money, the car loan and no little emotion. So, if you’re in the market, should you buy a new or used car?
As usual, our Burlington car loan won’t be telling you what to do. We will however be offering pros and cons of each so you can make an informed decision.
Pros of Buying a New Car
New technology and safety: New cars benefit from the latest technology and safety innovations. If you’re interested in either of these, buying new is your opportunity to get the newest tech.
Straight off the line: Nobody has driven your car except to drive it off the line. You’re the first owner, taking the car from new, creating your imprint in the driver’s seat, and being the first to enjoy everything your new car brings.
Dealer or manufacturer incentives: New cars often come with incentives including 0% finance, free servicing, full warranty, free upgrades, and other offers. You don’t get those very often with used cars!
You can add factory features: While cars can be customized with aftermarket parts, only new cars can have options fitted at the factory. This can have a huge influence on how the upgrade works or how it looks.
Cons of Buying a New Car
Price: There is no doubt you pay for the privilege of being the first. You’re paying at or close to MSRP for the car and will need a larger auto loan or more of a down payment to cover it.
Depreciation: New cars depreciate quickly in their first 5 years and anywhere between 20-35% in their first year. That’s a lot to contend with when you’ll be paying your auto loan for the next few years.
Pros of Buying a Used Car
Lower cost: Used cars cost much less than a new model. Even if you buy a car just a year or two old, you’re paying significantly less than a new car price. That can mean a lower car loan or a more premium car depending on your situation.
Less depreciation: Once that initial year is over, depreciation slows appreciably. It still happens but to much less of a degree than if it was new. That means far less chance of going upside down or losing too much value as the car ages.
Still get technology: While used cars won’t have cutting edge technology, buy something a year old and you’ll still get lots of new features. That does mean not having the very latest technology but you won’t be far behind.
Cons of Buying a Used Car
Less warranty: New cars can come with many years of warranty and free servicing. Most used cars will come with 3-6 month’s warranty at the most. There are other warranty options available though.
No incentives: There are usually few dealer or manufacturer incentives for used cars. Dealerships may offer special deals but the best will be reserved for new models.
So there you go. The pros and cons of buying a new vs. used car in Canada. We’re sure you can think of others. Which would you choose and why?
If you're ready for a car loan, we'd love to help with that! simply fill in the form below to get started.