So, it is time to buy a new car, or, at least, a car which is new to you.
The question becomes: new or used?
Here is a short list on the benefits of purchasing a used car, as well as some of the risks - and strategies on mitigating the latter.
Benefit from the depreciation absorbed by the original owner
Once a new car drives off the dealer’s lot, its value depreciates immediately.
Depending on the make and model, in the first two years of ownership, a new car can lose between 20% - 40% of its original value. This is reflected in the sale price of newer, lightly-used vehicles in the resale market. The owners are eating this loss and passing along a near-new vehicle, usually still under warranty.
Benefit from lower prices
As illustrated above, if you want to minimize your exposure to depreciation: buy a used car.
While manufacturers will incrementally add new bells, whistles and badges to new models, there really isn’t much difference between a brand-new car and a two-, three-, or even four-year-old car.
Is the latest Bluetooth connectivity, fender flare or generation of clear coat worth an additional $6,000?
Another strategy to consider when price is a primary concern is to seek out newer used cars with higher mileage. Ask for service records and how the miles were accumulated: high wear-and-tear city driving or lower stress highway driving?
A properly serviced and cared for highway driven vehicle hits the sweet spot.
Benefit from a huge selection of vehicles
With generally lower prices, your selection of potential vehicle makes, and models expands. So, a new Honda budget can become a used Acura, Lexus and Infinity budget.
Getting the used car benefits while mitigating the risks
There are risks to buying a used car. These include incomplete disclosure of previous damage or mechanical problems, lemons and not readily-apparent wear and tear.
When you buy a used car, there are two possible sellers: a private owner or a dealership. In some instances, you can get similar protections and benefits buying a used car through a dealership as you would receive buying a new car.
These include manufacturer certified pre-owned program protection. In most instances, a certified vehicle is closely scrutinized both cosmetically and mechanically and the covered by a limited warranty beyond the original factory warranty. But even if the used car is not covered under a certified pre-owned program, buying from a dealership will offer additional consumer protection. In British Columbia, under the Vehicle Sales Authority of B.C., protections include:
- Licensed dealers must sell vehicles in a clear and transparent manner
- Dealers must stand behind the representations they make about a vehicle
- Dealers must not withhold or provide information that would cause you to make an error in judgment about whether to buy the vehicle
- Dealers must meet strict standards, including certain declarations and disclosures
- Dealers contribute to a customer compensation fund for eligible claims
There is also the obvious benefit of having a bricks-and-mortar dealership you can return to for additional assistance after the purchase.
Victoria Premium Automobiles Ltd., for example, uses independent mechanics to assess, report and, if necessary, repair vehicles before they are placed in sales inventory. The work performed is included in the vehicle sales collateral. Victoria Premium Automobiles offers a limited dealer warranty.
Victoria Premium Automobiles also provides CarProof reports on all vehicles it carries. CarProof is a Canadian provider of vehicle history reports – a critical tool when you’re buying or selling a used vehicle. A CarProof report establishes trust and transparency between a used car buyer and a used car seller by removing the guesswork about a vehicle’s past – replacing it with impartial, accurate and real-time data.
Victoria Premium Automobiles also provides extra services private sellers may not offer, including complete vehicle cleaning and detailing which can extend to an ozone treatment which involves the emission of pure ozone (O3) into the used vehicle passenger compartment, eliminating odorous such as smoke, pet and body odors.
Of course, a used car dealership like Victoria Premium Automobiles also accept trade-ins to lower purchase prices and lease and financing can be arranged through the dealership.
Purchasing a used-car offers many great advantages. But you should do it right to minimize risk and maximize savings and satisfaction.