Why buying a used vehicle makes the most (financial) sense

Whether it's your dream car or just a grocery getter, your want for wheels is likely going to require a significant financial investment.

In fact, for most people, purchasing a vehicle will represent their largest personal spend, after their investment in a home. Since the majority of vehicles purchased in the country are ones that have been previously owned (approximately a 60-40 split used vs. new), it is well worth it to first look at buying used.

In large part, used car popularity is due to the sheer volume of quality vehicles available to the public—many of which are near new and still offer the bells and whistles that come with brand new models.

Here are a few reasons to consider buying a used vehicle, courtesy of the experts at autoTRADER.ca:

Depreciation nation: Generally speaking, new cars automatically lose nine per cent of their full price value the minute you drive them off the lot; around 20 per cent in the first year; and anywhere from 40-60 per cent in the first three years. Overall new cars depreciate about 15-20 per cent per year, while used cars at 10-15 per cent. Allowing someone else to pay for the depreciation is the strongest argument in favour of buying used (and it's hard to refute).

Tested and true: As mentioned above, late model vehicles—those up to three years old or so—will still like likely have much of the same technology and functionality as the brand new model. The rise of certified pre-owned programs from dealerships offers buyers yet another layer of protection, in writing no less.

Negotiation room: Used cars are purchased at various prices, so there is no set invoice price at which a dealer must begin negotiations, and there is more competition to choose from with models from several years available at a similar price range.

Less fees please: Fees such as freight and PDI, which can add up to thousands more to the sticker price, aren't a factor when buying used. The less you pay in fees, the more your wallet will thank you.

www.newscanada.com

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Carol Ireland

Carol Ireland

Sales Representative
CENTURY 21 Millennium Inc., Brokerage*
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