Pros and Cons of Buying Used Cars vs New in Waterloo Region
Used car or new car? That’s a question that you’ll inevitably ponder on when you’re looking to purchase an automobile. When you’re comparing very old used cars with new cars, the answer is easier to grasp. However, when it’s the debate between a slightly worn used car to a gleaming new car, the answer isn’t quite as clear-cut. But if you are prudent, and don’t mind missing out the chance to rip new car plastics, chances are there lies advantages to peruse a used car lot.
There are some immediate, perceivable differences between the experiences buying new and used cars. Of course, new car dealerships are typically premier. They have plenty of brochures to give, a nice place to sit in, comprehensive warranties, etc. That said, you’re pretty much expected to make a purchase when you step into the dealership, and the atmosphere can be rather stolid at times.
A used car dealer, depending on the type, can be much different. You can generally expect a warmer environment and a salesperson that’ll gladly accompany you to browse the inventory. We want your business, so we’re expected to offer the best customer experience possible regardless of what you’re wearing. As long as you’re genuinely looking for a car, we’ll help.
Of course, that’s not the only disparity between either buying a new car or a used one. The other big difference is when you want to pay for one. There are some inherent savings to be made on used cars, simply because they are used. Because they are not new, someone has already taken the initial steep, off the lot depreciation for you.
Generally, a new car when driven off the lot will be expected to lose about 20% of its initial value during its first year. This is the biggest argument, and also the leading factor as to why buying a used car may make more sense financially wise. If you’re paying financing plans, a used car will immediately make sense.
You avoid that crucial initial depreciation trench yet you’ll still able to make major use of the manufacturer warranty. It’s pretty much the comfort zone in terms of car ownership. But this is unlikely to be the case for most prospects, therefore, you’ll have to rely on financing plans. Used cars may have a higher interest rate, but the depreciation curve can aid you in offsetting the higher rate. Also most likely you are paying more in dollars terms for the total cost of a brand-new car, meaning that zero-interest rate is a gimmick most of the time.
A good example: 2017 Chevrolet Malibu
Let’s take a car as an example: the ninth-generation Chevrolet Malibu. It’s a nice mid-sized sedan that’s pretty new into this iteration, and also one we have on our lot now which is a 2017 model with the 1.5-litre engine and LT trim that currently has 47,202 km on the clock. That’s selling for $19,995 right now, and for our prime customers, we’re offering 5.04% APR. At 84 months amortization, that’ll come out to roughly $282 per month.
Compared to a brand-new 2017 Chevrolet Malibu of pretty much identical specs, using Chevrolet’s website build and price calculator, it comes out to around $395-$419 per month for 72 months, depending on the interest rate they get (we calculate between 3%-5%) it doesn’t give us the option for 84 months which it would be around $365 depending on the interest rate they get. That’ll come out to a difference of around $6,000 between the new model and used model of the same year, which is a very considerable amount. Both car loans with a zero down-payment. The only advantage of buying brand new might be if you pay in cash where you could get a rebate on the total price.
And that’s the advantage of shopping around, and perhaps forgoing the new car smell. Of course, it’s not as simple as that, you’d have to consider that you have one year less warranty. But we do offer exclusive extended used car warranty options, just ask around. The difference may not always be so drastic with such a variety of manufacturer financing incentives around nowadays, but that’s why you should always look around.Still skeptical? Go ahead and inquire us for more details. If you have a new car you fancy, perhaps it might just be worth checking out our lot for a slightly used one.