(NC)-The answer to whether it's better to buy a new or used car is inevitably that it depends on your individual situation.
Who you are, how you're going to use the vehicle, your financial situation, and even your opinion on 'that new car smell' are all determining factors, according to Mark Patry, CA, Partner of Welch & Company LLP in Ottawa.
"If you buy a new car, you aren't inheriting someone else's problems and you are entitled to the full warranty," he says. "The downside is that you're going to pay top dollar and the vehicle starts depreciating just driving it off the lot."
Charles Seguin, CA, vice president, TSi Auto Solutions Inc., agrees, "People with the financial resources who want comfort and peace of mind, or value the latest technology, prefer a new car."
When it comes to warranties, both note that you should read the fine print to know what is covered. The manufacturer's warranty generally covers a certain amount of mileage or a defined time period, but not normal wear and tear such as tires, for a new car. Warranties are also available for a used car, so consumers should ask about coverage and cost.
Whether buying or leasing new or used, Seguin says it's always wise to consider vehicles that hold their value, "It's important that people do their homework regarding different brands. With the Internet, access to research on vehicles through independent consumer surveys has never been easier."
When it comes to used cars, the greatest advantage is cost. "After three years, you can pay half price and still have 90 per cent of the driving potential available," says Seguin. "It's all about access to kilometres."
Cars last longer if properly maintained. "Corrosion resistance, among other things, has greatly improved. Now, if you buy a four-year-old car that has been well maintained, it's not unusual that it will last 12 years," says Patry.
If you decide on a used car, Seguin and Patry offer these tips:
. Find out the history of the vehicle to determine wear and tear - who drove it, for how long, and in what way. The number of kilometres is often not as important as how the car was used. For example, long distance highway driving is far better for a car than inner city, stop-and-start driving or being driven by many different owners.
. If buying privately, it's a case of 'buyer beware'. Chances are usually better if you are buying from a friend or family member rather than responding to an ad. Ensure a trusted mechanic checks the vehicle before you purchase it.
. One of the advantages of buying privately is that you save on the GST but you must pay the proper PST or you won't be allowed to change the ownership.
. Buy from a reputable dealer and consider the purchase of an in-house dealer warranty if no manufacturer's warranty remains. When sophisticated electronics are faulty, they require specialized diagnostics that smaller mechanics' shops may not be able to do as efficiently as dealers.
. Make sure the car is safety certified by the owner.
. Check with your insurance broker on premiums for different vehicles.
For further information, contact a Chartered Accountant.
