Used Vehicles: Six Good Reasons to Choose Them
Are you about to change your vehicle and torn between going for a brand new model or opting for a used one? Know that both options come with their own set of advantages. For new vehicles, there is, of course, the pleasure of getting your hands on a product that will be yours from day one and that you can customize more at the time of purchase.
In the case of used vehicles, there are obvious elements such as a lower initial purchase cost and the chance, perhaps, to get your hands on a model that is out of reach in the new vehicle market.
Regarding this second option, here are six good reasons to opt for it.
1 — Initial Purchase Cost
Because people don't get rid of new vehicles they buy after 6 months or 1 year, you generally find models in the used vehicle market that are typically at least 3 years old. This has a significant impact on the price difference compared to a new vehicle.
Let's take the average transaction costs as an example. In 2023, the median price for acquiring a new vehicle in the country was $64,215. This contrasts sharply with the average cost of $37,365 for a purchase in the used market, despite a record increase in demand for this type of vehicle due to the electronic chip crisis.
This difference of a little over $26,500 represents interesting savings opportunities. As mentioned, you can opt for a higher-end or better-equipped vehicle. You can also pocket these savings and use them as you please.
2 — Depreciation
Every model on the market sees its value depreciate year by year. However, none does so at a faster rate than a new vehicle in its first few years on the road. For example, research in this regard has shown that on average, a product loses 20% of its initial value in the first year alone.
This brings the average price of a new vehicle from $64,215 to $51,372 in just one year.
It's worse in the case of some models, especially in the luxury product segment.
Subsequently, declines are recorded each year, and it is more noticeable during the first five years of a given model on the market. On average, this amounts to a depreciation of about 50% over a five-year period. The losses are significant in the long term.
Obviously, with a used car, you don't have to absorb this depreciation. In fact, you benefit from it. Even if your used vehicle also loses value with each additional year on the road, depreciation is less after four or five years. You can use our link to estimate the value of your current vehicle.
3 — Insurance Costs
Every vehicle must be insured, and as a general rule, the premium you will be required to pay is directly related to the value of the product. Since a new vehicle is worth more and is generally more expensive to repair in the event of an accident, this drives up premiums.
The site Ratehub.ca looked into this. Research conducted on 2010 models as well as new vehicles from 2019 led to the following conclusion: buyers who opted for a 2010 model saved, on average, from 5% to 28% on their premiums.
4 — A Broader Range
If you go to a new vehicle dealership, you have a wide range of models, colors, equipment levels, and options. However, you must choose a product from that brand. If you want a different brand, you have to go to another dealer.
At a used vehicle dealership, you can try models from different brands. You can also choose from different types of vehicles. Furthermore, you will have the opportunity to try a variety of completely different products to make a more informed decision. In some cases, large used vehicle dealers may offer a specific vehicle with different trims or distinct colors.
If you're not entirely sure about the type of vehicle you want to acquire, the option of a large used vehicle dealership is truly appealing.
5 — Vehicle History
In the past, when opting for a used vehicle, you had to live with uncertainty about the history of the chosen model. Had it been in an accident? Did it have a lien? Was it flooded? You get the picture.
Today, thanks to the Carfax vehicle history report, you can truly have peace of mind when acquiring a used model. This report will tell you if the vehicle you desire has been in an accident, if it has been subject to an insurance claim, and also provide you with access to maintenance reports.
Truly, this is a very useful tool that allows you to move forward with confidence.
6 — Better Vehicles
Not so long ago, when a model approached 200,000 km, it was nearing the end of its useful life. It was less appealing to go with a used vehicle not knowing how many years it could offer. Nowadays, with various advances in technology and the quality of modern vehicles, they last longer than ever. Experts agree that models are designed to run up to 400,000 km, provided their maintenance program is respected by their owners (hence the importance of the Carfax report).
In the past, a used vehicle with 100,000 km had already seen a lot of wear and tear. Today, we know it can go three or even four times further.