Which is better: a new or used vehicle?

The decision to buy a new vehicle instead of a used one requires that you consider the following:

  • Purchase price. A new vehicle will clearly cost you more than a used vehicle of the same make and model. The extent to which the new or used car will drop in value is based on the depreciation rate chosen - average, high or low.

  • Depreciation. Some vehicles depreciate faster than others do. The slower the depreciation rate of the vehicle, the higher its resale value.

  • Operating costs. A used vehicle is likely to require more maintenance and repair than a new one. Also, fuel consumption may be less efficient.

  • Years of ownership. The longer you own the vehicle, the lower the average annual cost, as acquisition costs are spread out over more years.

  • Financing cost. Interest rates for new vehicle loans are generally lower than for used vehicle loans.