When it comes time to purchase a vehicle, it’s inevitable that most buyers will ask themselves, “Should I buy a new or used vehicle?” Well there isn’t necessarily one universal answer to this question as every situation is unique, but here is some food for thought. Please bear in mind this post is directed at the bulk of the market given the current conditions.

Used Car Supply Shortage

There is a shortage of used vehicles in the Canadian market. This is a result of the Great Recession of 2008 and 2009 which hampered Canadian car sales. Consequently there are less six or seven year old cars being traded in, which would have been available on the used car market.

The other issue placing pressure on the Canadian used car supply is the Canadian dollar. With the fall of the dollar, the Canadian used car market is seeing a huge flux of American used car dealers snapping up Canadian inventory. Given the value of the American dollar, they are happy to pay a premium price to get access to the most desirable used car inventory.

Attractive New Car Incentives

Manufacturers and new car dealers are hungry to sell cars, and they are creating attractive offers. Some manufacturers are offering 0% financing up to 8 years, and others are offering thousands of dollars in cash rebates if you purchase their vehicle. This is money in your pocket, and narrowing the purchasing cost between new and used.

And we haven’t even looked at leasing. Depending on the vehicle, your driving habits and interest rates, leasing may in fact be a more attractive financing solution to purchasing a new vehicle, and may result in lower monthly payments. With a lease, you make your monthly payments and simply return the car after the lease ends, or you will have a right to purchase the vehicle at the market value. This approach does have merit as many manufacturers have created attractive leasing programs, and also bear in mind a car is a depreciating asset. So depending on your situation, it might make better financial sense to lease a vehicle.

Peace of Mind

If you are someone who is going to drive their car into the ground, you are still probably better buying new. As you are the first owner of the car, you can ensure it will receive the proper maintenance and care from day one. And as the original owner, you have a full new car warranty straight from the manufacturer, which lasts between 3 and 5 years, depending on the make. Plus you will receive an additional few years of service from the vehicle, compared to buying a car or truck that is already a few years old.

If you have any specific car buying questions, I am happy to help. Please feel free to email me at [email protected]