Buying a new car can be one of the most exciting—and stressful—purchases of your life. New cars can be pretty darn expensive. And it’s not just the price of the car that depletes your bank account. It’s the monthly insurance payments, and it’s the maintenance and repair using new and expensive parts. 

Why not buy a used car instead?

You may be reluctant to give up the dependability and peace of mind of a new car. But the benefits of buying a used car instead are worth looking at.

Buying a Used Car Saves You Money

New cars depreciate rapidly, almost the minute you leave the car lot. You pay a premium for a brand-new car—plus fees for just about everything the dealership can think of.

But if you’re willing to look a little harder to find the perfect used car, you can save a substantial amount of money. Once a brand-new car has been driven off the lot and has a few miles on it, it cannot be listed as “new” ever again. If you sell it, you’ll have to accept a much lower price for the vehicle than you had to pay when it was brand-new.

So get online and find the perfect used car for you. With a little hard work and care, you can easily save $15,000 or more.

Most of the Depreciation Has Already Happened

One of the biggest reasons that used cars are so much cheaper than new cars is depreciation—the decline in value of something over time. Brand-new cars are one of the fastest-depreciating assets in the world. According to automotive research firm iSeeCars.com, in Canada the average car depreciates by a staggering 50 percent in its first five years. 

This means that if you spend $40,000 on a brand new car, five years down the road it will be worth only about $20,000. But that’s where buying a used car comes in. Instead of being the guy who takes a $20,000 loss, be the other guy. Be the guy who buys a five-year-old car for $20,000 less than its original price.

After the first few years, depreciation slows down dramatically, and from then on most cars maintain a relatively steady value. Buying a used car lets you avoid most of the drop in value.

Lower Insurance Premiums

When you’re shopping for your next car, the cost of the down payment and monthly payments are not all you need to worry about. There’s also insurance, which can add hundreds of dollars a month to your car-related bills.

But if you buy a used car, your monthly insurance premium will probably be much more affordable. When an insurance company insures your car, the biggest determinant of the cost of your insurance is the value of your car. Since used cars are so much cheaper than new ones, the insurance company charges much less to insure them.

More Car for Your Money

Let’s say you’re interested in the Toyota Camry, one of Canada’s most popular vehicles. A brand-new 2021 Toyota Camry will set you back a little over $30,000 for the base model.

Instead of spending $30,000 on a Camry, you look at used cars in the same price range. For the same price or less, you can spring for something nicer, bigger, sportier. With the same $30,000, you can get your hands on some amazing used cars, such as these listed at Autorama.ca:

• 2015 Audi A4 ($25,000)
• 2017 Cadillac XT5 ($27,500)
• 2017 Mercedes-Benz C300 ($28,500)
• 2017 BMW 330xi ($25,500)

Better for the Environment

On the road, modern cars are usually better for the environment than the used cars driving next to them. But driving is not the only source of emissions.

In fact, a large part of the lifetime emissions of a vehicle occurs during the production stage. If you’re buying a used car, then, it’s as if the production-stage emissions have already been priced in. 

Although you may believe that your effect on the environment is trivial, over time it all adds up. If a lot more people choose used cars instead of new ones, the environment would be better off in the long run.

Certified Pre-Owned Options

One reason people won’t buy a used car is that by doing so they would be giving up the reliability that comes with a new car—and the warranty. But a certified pre-owned (CPO) vehicle provides much of the same protection at a fraction of the cost.

CPO cars are cars that have been thoroughly inspected to ensure that they are reliable and in good condition. The manufacturers are so sure of the quality that they usually include a warranty as well as bonuses like free roadside assistance and even discounted services for the life of the car. You can also request the vehicle’s CARFAX report and vehicle history  to make sure there have never been any major problems with the car.

If you’re looking at CPO cars, however, look at manufacturer CPO cars rather than dealership CPO vehicles. The manufacturers typically offer a better warranty and service package than the dealerships do.

Conclusion

You have many reasons to consider buying a used car instead of a new one. Buying a used car can save you tens of thousands of dollars right off the bat. Used cars also hold their value better and cost less to insure. If you combine these savings with the fact that you get more bang for your buck and cheaper warranty protection, and are even helping the environment, you may wonder why you ever considered buying a brand-new car.