Should you buy a new or used car?
Wintertime. The time of year when Canadians get into their cars and hope they start. If you find the outcome is in doubt more mornings than not, it may be time to think about getting a new car.
Buying a new car
Cars are the second-or-third-largest purchase you’ll ever make, after a home, and potentially education. Few people have the money lying around to get a new vehicle whenever they want. It tends to demand some planning and saving. However, despite spending tens of thousands of dollars on a new car, not everyone does sufficient research before making the purchase.
There are quite a few reasons why new cars are more popular than used cars. People who buy a new car benefit from peace of mind, knowing that the vehicle is mechanically sound, comes with a dealer warranty and doesn’t have any hidden defects that a previous owner “forgot” to mention.
What’s more, buying a new car is usually considered a more enjoyable experience than buying a used car. New cars are bright, airy and clean. They are shiny and come with that famous smell. Plus, when you buy a new car you can customize it with all the features you want to really make it your own.
These niceties come with a downside, though – although today’s low interest rates make monthly car payments downright cheap, a new car is significantly more expensive than a used car. In fact, even decades later, the saying “your car loses value the moment you drive it off the lot,” is still true.
Buying a used car
Car shoppers hoping to save a bit of money can look at buying a used car. Used cars, even ones with not-too-many kilometers, are often thousands of dollars less than a new comparable vehicle. Certain car dealerships even offer “certified” or “verified” used cars – vehicles that are in such great condition that the dealership is willing to offer a warranty.
Another option in the used car market is to purchase a previously leased car. At the end of a lease, car owners who have tired of their vehicle return the car to the dealership. These vehicles are in good condition and have relatively few kilometers on them.
Car shoppers who are turned off by dealership costs can try used car lots or private sellers. As a general rule, used car lots have poor reputations. Be sure to do your research and find a reputable used car lot before you visit and fall in love with your dream car.
Private sellers can be hit or miss. On one hand, some sellers might not know the true value of their vehicle and buyers can score a deal. On the other hand, the opposite might be true. Once again, research is required before purchasing a used car.
The biggest downside to purchasing a used car is the potential for later issues. The main attraction of getting a used car is the savings that come with it, but maintenance costs can add up pretty quickly. Not all used cars will lead to problems, of course, but research is required.
Regardless of where you purchase your new car or your used car, remember to run a budget ahead of time to make sure you can afford it. Factor in gas costs, insurance costs and maintenance costs. If you need a little assitance, apply for a loan. Then start shopping. Demand a test drive and negotiate hard on the price. With such a big purchase, be sure to take the time to make the best decision for your lifestyle.