When you decide to get a car for the first time, it is normal to find a lot of available options, but there is a major group of options where we actually make the choice from: New cars and used cars. The fact of deciding between New vs. Used Cars is hard, but the most important thing is that you can understand that there are way more things that "Km on the odometer" and an "old year date".
On the following article I will describe the main differences between one and the other one, not with the purpose of convincing anyone; just to present the actual facts that define one kind of product and the other one:
New vs. Used Cars
As I said before, many clear arguments arise from this clear division, but I will focus on five key aspects to compare both options:
- Vehicle Price
- Vehicle Features
- Vehicle Conditions
- Warranty Options
- Purchase Options
If you are strongly considering a lease, please feel free to use our Car Lease Calculator.
Purchase Price
Like any other kind of product available on the market (toys, food, cleaning products...), cars have an MSRP. The MSRP or "Manufacturer Suggested Retail Price", is a "province based" price specification defined by the car maker itself.
This means that, for example, Honda suggests that, in Québec, the 2017 Civic LX Manual with the base black base color has an MSRP of 21,141CAD while in Yukon, where the vehicle sells less than on more southern and populated areas, the price is of 18,640CAD, a 2,500CAD difference.
New Car: Same price on multiple dealers
Now, in your province, for all Honda Dealers, the MSRP is the same, and this is how you will get a similar offer anywhere you go for the same exact car: a brand-new 2017 Black Honda Civic LX.
The Honda Civic has a 2,500CAD MSRP price difference between Québec and Yukon.
Used Car: Different prices, for sure
For used cars, you need to understand that, even 2 exact same models purchased around the same date and even with a similar mileage, both will have different starting prices.
Depending on each previous owner (or owners) habits, where these were driven, as it is not the same 50,000 kilometers mostly on a highway than 40,000 rolling downtown Montreal. It is really hard to determine how much depreciation a car has received over time and even more depending on the context where this was used before.
You can find different cars at the same or similar prices across multiple dealers, but it will be definitely hard to find the same exact model with a very similar price and "use" elsewhere.
Vehicle Features
New Car: Highly customizable
And this makes sense, of course. When you go to a Ford dealer for an F-150, you have dozens of similar models available, and even dealers are willing to bring the specific one you are looking for if it stills in production or even available elsewhere.
You can freely define color, packages, rims, customizations, accessories, and features.
Used Car: It is what it is
Yes, that's right. For used cars, you need to evaluate, from the available options, which one fits your particular needs or what can you do extra to the vehicle if you bring it later for a customization garage to adapt new accessories to your car.
It doesn't directly means that will be cheaper or more expensive, but definitely is something that the dealer providing the used car, will be more limited to do for you.
Vehicle Condition
New Car: Of course, brand new.
A new car is a new car. There is no discussion of it. Still, there is a delivery checklist that you need to go through when you acquire a new car, just before driving out the parking lot with it.
Used Cars: You have to go into detail
And this is pretty wide. If you are a person who doesn't care too much about a few scratches or dents on the body paint, some small pieces of broken leather on the interior or some "yellow" on the headlights, then you won't have many problems finding what you are looking for.
On the other hand, if you are picky with any of these things or even on more "heavyweight" details like the actual car mechanical conditions, then you need to know that it will take you probably months to find a car that makes you happy.
This is a very arbitrary matter, so that I won't go deep into it, but I'm sure you got the idea.
I wrote a list of things to check before buying a used car that you may find interesting.
Warranty
A warranty can be seen as just a mechanical insurance. If "something mechanic" breaks during a specific period of time, the warranty provider will assume the costs.
Warranty companies (including the manufacturer itself) will just pay for any repair that fits under your warranty terms and under the "standard" costs of fixing it. This means that, if your engine has serious problems and you were just driving it by normally, someone else will pay for the costs related to the issue.
New Car: Three years included by default
And in some models even more. Most manufacturers cover three years or 60,000Km, the one that arrives first to the car. Some manufacturers like Hyundai, Kia & Mitsubishi, offer five years warranty by default.
Still, this doesn't mean that it is just that. A warranty can be extended for additional premiums for up to 5, 6 and even 7 years long or 160,000km for a few manufacturers.
Used Cars: Depends...
And I mean depends because if you buy a car that still fits into the warranty period, then you are covered! Still, many "Extended Warranty" companies exist in Canada for different kinds of plans, periods and mileages, even after the 7 years of the vehicle.
The Warranty topic is also very polemic, but I won't refer to it right now as I'm just presenting a wide overview of all the things to consider.
Vehicle Purchase Options
New Car: Lease, Finance or Cash
With new cars, manufacturers use any of these three options to sell the stock. Taking into account that Car Leasing will result in a Used Car for sale in 3 years, the main preference of dealers is to actually sell the vehicles.
But Car Leasing is so popular in North America, that the option is sometimes taken by 7 over 10 clients who acquire a new car.
Financing or doing a Cash purchase is the traditional way we acquire any other product in the market, so doesn't make much sense to explain here.
Just as a note apart, new car interest rates are usually lower than used ones and, in some cases, manufacturers like Chevrolet or Ford offer 0% interest rate on 72 months financing for many of their models.
Used Car: Finance or Cash
The same as new cars, except that only a few exceptions of vehicles like BMW, Audi, and Mercedes-Benz, used car leasing isn't an option for the rest of manufacturers.
Financing and Cash purchase is the only way, and interest rates are usually starting above the 3.99%.
Before deciding, take a look at Lease Prices
Because you will be surprised with what can you actually find. Car leasing isn't just for rich people. It is for everyone, it is available everywhere and is the most popular way of solving transportation needs in Canada, where having your car ready 24/7 is sometimes a matter of life:
