Is a new or used car for you? Regina SK
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Is a new or used car for you?
(NC)-New or used - that's the question that is constantly put to the pros. Consider these tips if you decide to go the route of purchasing.
Market Favours New
Given the strong Canadian dollar, now is a great time to buy a new car, according to Chartered Accountant Charles Seguin, president, Triaveluin Retail Advisors in Aurora.
"The market is changing daily, with incentives including low or even no interest, revamped base-price strategies and competitive dealer reductions. Canadian cars will always be more expensive than U.S. cars due to environmental and safety rules, but the old price differential has been greatly reduced on most models."
While used cars have advantages and disadvantages, the main advantage is a better price. "Plus you do not pay GST on a private sale," says Chartered Accountant Anil Chawla, Deloitte & Touche LLP in Mississauga. "Buying a car that is six to nine months old can save on the purchase price - new cars depreciate as much as 30 per cent in the first year.
"While you pay less upfront, your operating and maintenance costs are higher, and many used cars don't have warranties or the newer safety features. You don't know what's under the hood, so ask two key questions: Who has driven it? Has it been in an accident? The vendor should disclose the car's history in writing, especially with a private sale. Also ask to have the repair log showing the car's history, problems and service record."
If you are buying a used car, Seguin advises using either a car dealer with older models on the lot, or a member of the Used Car Dealers Association of Ontario (http://www.ucda.org/).
Green, Safe and Loaded
Seguin says a big advantage of a new car is greater fuel efficiency and emissions control, which is now available on all new cars from small compacts to SUVs. Add upgraded safety features like air bags and electronic traction control, and a new car starts to justify its cost, especially if you plan to drive it for several years. You'll see few or no repair costs over the first two years and lots of toys like TV screens in mini vans to keep the kids happy.
"Pride of ownership and confidence come with a new car," adds Chawla. "It can be satisfying to know that no one else has driven it."
Do Your Homework
Whether it's a new or used car, you're still spending a lot of money, so consider other important factors such as usage, family safety and dependability, as well as price.
Chawla advises checking Consumer Reports for new and used cars. And make sure you test-drive the car first. When buying a brand new model, be aware that its performance and track record are largely unknown - it may take three or four years to correct any glitches. To save costs, investigate buying a demonstration model from your dealer, which has been driven by a senior employee and has about 10,000 km on it.
For more information, contact a Chartered Accountant.
Brought to you by the Institute of Chartered Accountants of Ontario.
- News Canada
Editors, this article is for use in Ontario only