Should I Buy New or Used?
2.0 Buying a New Vehicle
Deciding whether you are buying a new vehicle over a used one, will be the next biggest decision.
In this article, you are going to learn the advantages of buying a new vehicle.
At this point in the article, you have narrowed down the vehicle that best fits your needs. And perhaps you’ve already decided whether you will be buying a new vehicle over a used one. But at the very least, keep reading these article.
What is the worst thing that could happen? You learn something new.
And the best result? That you save thousands of dollars!
Advantages of Buying a New Vehicle:
The obvious difference of buying a new vehicle is definitely price. If you are on a budget, always check the MSRP (Manufacturers Suggested Retail Price) on-line and make sure that its realistic.
If you have a certain make / model in mind, looking for a vehicle that is a few years older to fit your budget, will open up the door to more features and comforts.
That being said, here are the main advantages of buying a new vehicle:
Don't guess the history of the vehicle
Whatever vehicle you purchase, you will be the first owner. You don’t waste time figuring out if the vehicle had previous accidents or damage. You don’t take a shot in the dark and hope that the previous owner drove it hard or if they maintained it properly.
What you see is what you get.
Manufacturer's Warranty
The manufacturer will offer you their most comprehensive warranty. Normally they will offer two different warranties without added cost: Comprehensive Warranty and Power Train Warranty.
The comprehensive warranty (also referred to as Bumper to Bumper) will cover almost everything in your vehicle, that is not considered wear-and-tear (ie brakes, rotors…etc). And unless you physically damaged the vehicle, the dealership will be more than happy to fix any problem.
The power train warranty will cover the main components of the power train (ie engine, transmission…etc). Those repairs tend to be the costliest in a vehicle, because most of the components are buried inside the engine.
Keep in mind, for both warranties, that you a responsible for the regular maintenance of the vehicle. If the manufacturer can prove that you didn’t change the oil regularly for example, they can and will void your warranty. Also, if you complain about a problem to the service department and they can’t reproduce it or nothing is actually broken, they will charge you for the diagnosing the vehicle.
We cover manufacturer warranty details in the later sections ( 7.0 Warranty & Post Sale Service )
To help bolster sales, most vehicle manufacturers offer financing through their own lenders (ie BMW Financial Inc). These lenders will often offer 0% financing, they might offer leasing options and they might even approve people who most other lenders outright decline.
The main priority of these lenders isn’t necessarily to make money from lending you money (although they generate billions); its to boost sales for new vehicles.
So take advantage of that zero percent interest loan or the write-off that comes with leasing a vehicle.
Manufacturer's Suggested Retail Price (MSRP)
Although you never want to pay the MSRP of a new vehicle, at least it gives you a starting point. Keep in mind, that the MSRP is still at times 20% – 30% above the dealer’s cost. The MSRP takes into account all the overhead that a dealer might face and those fancy new dealerships aren’t built for free.
Every commercial, every building and every fancy signage is paid for by the customer. It comes directly from what you over-paid on your vehicle and it comes directly out of your pocket.
So don’t let the dealership fool you into paying that price, but instead use it as a starting point for your negotiations.
Manufacturer's Guarantee
Although dealerships are independently owned and operated (except for maybe TESLA), they still have strict guidelines set out by the manufacturer.
Do you have any concerns or doubts about the way you were treated or your new vehicle? Besides dealing with the provincial regulator, you can also take your concerns to the manufacturer who has their public image and reputation to consider.
2.2 Why Not to Buy New Vehicle –>