Should You Buy A New Or A Used Vehicle?
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When it comes to buying a vehicle, many find it difficult to choose between new and used. Overall the two allow for very different approaches to owning and utilizing your own vehicle. In this guide, we’re going to cover the pros and cons of both new and used vehicles.
Used Vehicles Pros
Used vehicles are perfect for people looking to save money. Cars depreciate a lot in as little as a year, meaning they’ll be very cheap. Especially when compared to a brand new vehicle. Used vehicles are also perfect for people who use their vehicles for work. A work pickup truck, for example, will be far more useful if you’re not constantly worrying about scratching or damaging it. With a new pickup, you’d be doing exactly that. Used trucks are perfect for workers because you don’t need to worry about them getting dirty or scratched up. Used vehicles are also easier to modify because there are more stock and aftermarket parts available. This is perfect for workers because you can modify your vehicle easily. Bigger wheels, skid plates, bed covers, and everything else you may need to be an efficient worker. For people who want to modify their cars for recreational purposes, used cars are also perfect. Like work vehicles, stock and aftermarket parts are more likely to be available for used vehicles because they’ve been on the market for long.
Used Vehicles Cons
Although used vehicles can have a lot of pros, they do have some cons. First of all, used vehicles do not use the newest technology that carmakers have available. It’s doubtful that a used car will have modern-day sensors, intelligent camera systems, and other prime technology. Also, a used car probably won’t have the best safety technology, as it’s, in a sense, outdated.
Secondly, used cars are prone to breaking far more than new cars. Engines grow old, and transmissions slow down. Tires wear out, timing belts break, and large repair bills are sent your way. Fortunately, people who are mechanically skilled will save a lot of money by using used vehicles because they can fix them on their own. Others, however, may be stuck with expensive repair bills.
New Vehicle Pros
Owning a new vehicle can be a freeing feeling. You’ll have access to the newest technology available. Not to mention you’ll be way safer in a new vehicle. Safety standards and technology are always improving, and new cars are where you’ll find that new and improved technology.
Although new vehicles are more expensive than used vehicles, you have a lot more flexibility with regards to payment plans. Not everyone can buy a car completely, meaning you’ll have to finance it or lease it. Financing is when you take the overall price and pay it in increments over a preset amount of years. When you’re done paying it off, the vehicle is one hundred percent yours. Leasing, on the other hand, is different. When you lease a vehicle, you’re basically renting that vehicle. You’re committed to only a portion of the overall price, and you’ll likely be eligible for extended warranty plans. Do keep in mind however, that leasing a vehicle means you don’t own it, and you’ll be unable to modify your vehicle. Also, there is usually a preset amount of kilometers you can drive. Leasing a car is a viable option for wealthier customers because you’ll be able to switch cars every few years with little to no difficulty.
New Vehicle Cons
As previously mentioned, buying a new car can be quite expensive. Although the payment options are very useful and convenient, they do have their downsides. Financing a vehicle can be expensive every month, and you’re not usually covered with respect to warranties. This means you’ll be required to pay repair and maintenance costs. As for leasing a vehicle, the downsides come when considering the fact that you don’t actually own the vehicle. This means you can’t modify it, and the damage that’s covered by warranties is limited. Workers won’t find that lease vehicles are best for them. As well as people who want to modify their vehicles for recreational purposes. Another potential downside is the fact that you can only drive a limited amount of kilometers based off of your initial agreement. Driving over this limit will result in excess charges.
Cost Comparisons
To compare the costs of a used car versus a new leased car, we’re going to use one of the most popular types of cars out there. A compact crossover SUV. This style ranges from the Ford Escape to the Mercedes 250 GLA and is one of the most popular all over the world simply due to their practicality and convenience.
For this comparison, we’re going to assume the use and new cars are owned for approximately six years, as is the Canadian average. For the lease, we’re going to assume that the leaser is also leasing vehicles for 6 years. This will be separated into two of the same vehicle, each with a 3 year lease.
Regarding a leased vehicle, the average compact SUV has an overall price of approximately $28,863. The average interest rate for a compact SUV is 0.001127, and the fees for driving off in the vehicle are approximately $2,246. This would result in your monthly payment being $356 each month. This applies to both leases, meaning you’ll be paying $356 a month for six years (3 year lease periods are standard).
Regarding the financing of a used vehicle, the average price of a compact crossover SUV that’s about 4 years old is $18,792. The average downpayment in Canada on a car of this class is $2,354. When you factor in an interest rate of 8.7% (as is average in Canada for a used car), you’re looking at monthly payments of $336.
Regarding the financing of a new vehicle, the average price of a compact crossover SUV is about $27,435. With the average Canadian down payment being $3,533 with an interest rate of 6.1%, new car buyers are looking at $456 payments each month.
Analysis
So it looks as though the best route to take if you want a new car is to lease it. However, leasing a vehicle means it’s not necessarily yours. You can’t modify it, and you have to keep it under a predetermined mileage, but you save $3,418. Shelling up this extra amount allows you to own it for as long as you want, drive it as far as you want, and customize it to your liking.
A used vehicle is $8,642 cheaper than buying new, and $5,224 cheaper than leasing a new car. This is a great deal if you don’t mind sacrificing the newest technology, as well as the fact that someone owned the vehicle before you.
Final Thoughts
Both used and new cars have their benefits and their downsides, so it’s really up to you to decide what works best. Which downsides are worth tolerating, and which aren’t. Your career, budget, and so many more factors go into your decision. With so many cars out there, it may take you a bit to find the right car for you, but when you do, we hope this article will have helped you get there.
