The eternal debate: new or used car? The answer depends on your budget, your tolerance for depreciation and how many kilometres you drive per year. Here are the real numbers.
1. The hidden cost of buying new: depreciation
A new car loses on average:
- 20% to 25% in the first year.
- 40% to 50% after 3 years.
- 60% to 70% after 5 years.
In concrete terms: a vehicle that costs $35,000 new will be worth about $17,500 after 5 years. That is a $17,500 outright loss in value, not counting the interest on the financing.
2. The sweet spot: a 2 to 4-year-old vehicle
The ideal age to buy used is between 2 and 4 years. At that stage:
- The big depreciation is behind it.
- The vehicle is still modern (technology, safety).
- Often still under partial manufacturer warranty.
- The first defects (if any) have been sorted out.
3. Five-year comparison (real case)
Option A: New at $35,000
- Monthly payment (60 months @ 7%): ~$693/month
- Total paid: $41,580
- Residual value: ~$13,000
- Net cost over 5 years: $28,580
Option B: 2-year-old used at $24,000
- Monthly payment (60 months @ 8%): ~$487/month
- Total paid: $29,220
- Residual value: ~$10,000
- Net cost over 5 years: $19,220
Savings: ~$9,360 over 5 years. That is almost two years of free payments.
4. But new has its advantages too
- Full warranty: generally 3 years/60,000 km, with some manufacturers going up to 5 years/100,000 km on the powertrain.
- Exact choice: colour, options, interior, all made to order.
- Promotional rates from the manufacturer on certain new models.
- No history: no accident, no careless owner.
5. Advantages of buying used from a dealership
- LPC warranty applied automatically based on age/mileage (see our article on the LPC warranty).
- Mechanical inspection included.
- Trade-in possible for your current vehicle, with a tax deduction.
- Financing through multiple lenders with a single application.
6. Our recommendation
For most budgets, a 2 to 4-year-old vehicle with less than 80,000 km offers the best value for money in Quebec. You avoid the big depreciation, you keep modern technology, and the LPC warranty is still worthwhile in category A or B.
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