Is Buying a New Car Worth It? Here Are the Pros and Cons
Is Buying a New Car Worth It? Here Are the Pros and Cons
Posted on June 6, 2024
Is buying a new car worth it? Many car buyers we serve in Calgary face this dilemma and it's sometimes hard balancing the appeal of a new vehicle with the higher costs involved.
Out of hundreds of vehicles in our inventory, only a portion are new; the used car market is always something to consider. It's definitely worth looking at the pros and cons of each type of ownership, covering everything from depreciation to the latest features, to help you make a well-informed choice.
New vs. Used Vehicles' Key Decision-Making Criteria
- Buying a new car involves significant costs, including up to 10% initial depreciation, potentially higher insurance premiums, and financing deals, which can add up over time.
- Canadian Black Book announced several Hyundai models as top 3 placements in their Best Retained Value Awards: the Accent, Tucson, and Palisade; consider these as used car purchases!
- Financing can depend on the model you choose and whether its new or used; but you can sum interest costs with insurance, predicted maintenance, and fuel costs for total ownership costs!
- New or used, Hyundai SmartSense delivers peace of mind, comfort, and confidence; most models from recent years have this feature standard.
- Hyundai's warranties are some of the best, including 5-years/100,000 km comprehensive for all new purchases.
The True Cost of Buying a New Car
A Hyundai Elantra is a great car, as our sales advisors can tell you. But it's definitely got costs associated with it, which the auto industry likes to call the cost of ownership, which includes depreciation. It's key to weigh this cost against retained value, or resale.
What exactly are you signing up for when you opt for that brand new vehicle? Costs aren't all bad, but it helps to understand how they stack on each other. There's an initial depreciation unique to new cars, insurance premiums, and more resulting in total cost of ownership. This sum is what helps you understand the value of a new car versus its cost.
Understandably, your car purchase costs more than sticker price. Our customers sometimes ask our sales advisors to go into the specifics so they can get a sense of the real expense. Purchasing a new car does have unique benefits on those costs, however! Let's look at a few.
Depreciation Rates on New Cars
With a new car losing 10% of its value the moment you leave the lot—and up to 20% in the first year, depreciation is a concern and an inevitability. Though the rate slows down, after 5 years, you might be looking at a car worth only a portion of what you paid up front or what you will have paid after your car loan is all paid off.
Retained Value You can expect form Hyundai
Not all rides experience the same depreciation, with some of our models holding their value like a vintage wine. Canadian Black Book recently awarded Hyundai with Best Retained Value Awards. The brand itself won third Most Improved; the Hyundai Accent won third in the car category and the Palisade, midsized SUV second place!
Insurance Costs for New Vehicles
Insuring a new car can often feel like a high-stakes game of poker – with higher stakes. The gleaming new set of wheels parked in your driveway might be a delight, but it’s also a bigger liability in the eyes of insurers, thus fetching higher car insurance premiums.
Make, model, and safety features all play their part in the insurance roulette, not to mention the ever-climbing rates that are sure to affect your premium. Remember, the house – or in this case, the insurance company – always wins, but knowledge of these costs is the ace up your sleeve.
Financing Deals and Interest Rates
Financing a new car from dealership finance to personal loans, you've got options to drive home in a great vehicle. When you get a car loan through Country Hills Hyundai, low-interest rates or even zero-percent financing, are possible—if you meet specific terms. But even for no credit or bad credit, we can help you finance your vehicle.
It's true that new cars don't always have the same interest rates than their used counterparts. But no matter what you do, financing might be the best way forward in owning a Hyundai. Monthly payments are something you can better calculate when you know what you're looking for, as well as the advantages of buying new!
Advantages of Owning a Brand New Car
When you buy a new car, you gain the benefit of rapidly developing technology. EVs from Hyundai, now conforming to North American Charging Standards, are a great example of cutting-edge benefits.
The allure of a brand new car, especially a Hyundai, isn’t just about the prestige or that intoxicating new car smell; it’s about the reassurance that comes with reliability, cutting-edge safety features, and the safety net of warranty coverage.
These revolving beauties promise peace of mind with their pristine parts and lower risk of unexpected breakdowns. And let’s not overlook the advanced safety features and technologies like Hyundai's.
Proprietary Hyundai Safety and Assistance Technology
Hyundai vehicles come equipped with a suite of proprietary safety and assistance technologies designed to enhance your driving experience and keep you safe on the road:
- Hyundai SmartSense: An easy-to-learn safety tech that includes Forward Collision-Avoidance Assist, Lane Keeping Assist, and Driver Attention Warning.
- Blind-Spot Collision Warning (BCW): Alerts you to vehicles in your blind spots, helping you avoid potential collisions when changing lanes.
- Rear Cross-Traffic Collision Warning (RCCW): Provides warnings of approaching vehicles when reversing out of parking spaces.
- Smart Cruise Control (SCC): Maintains a set distance from the car ahead, adjusting your speed as needed.
- Highway Driving Assist (HDA): Combines Lane Keeping Assist and Smart Cruise Control to help maintain lane position and safe following distance on highways.
- Surround View Monitor (SVM): Uses multiple cameras to provide a 360-degree view around the vehicle, making parking and maneuvering easier.
- Safe Exit Assist (SEA): Prevents passengers from opening doors if it detects an approaching vehicle from behind.
- Remote Smart Parking Assist (RSPA): Allows the vehicle to park itself with minimal driver input, useful for tight parking spots.
Features like these protect all stakeholders on the road, from pedestrians to the driver. The advantage of buying new is that you get the latest and greatest in these technologies!
Plus, the added perks of comprehensive warranties and roadside assistance services smoother over the odd mechanical hiccup, making our car buying service even more valuable. On the other hand, a newer used Hyundai has the best tech from its year and make—the more recent, the more of the above list it has!
Manufacturer’s Warranty and Free Roadside Assistance
The beauty of a new car warranty from Country Hills Hyundai is in its safeguarding from the financial burden of major repairs for a considerable time post-purchase. Additionally, the roadside assistance we offer ensures you are never stranded, even if your Hyundai encounters unexpected issues.
Remember, while our dealership may be your first point of contact, any authorized Hyundai dealership can perform warranty repairs. Great for road trips in your new or newer used vehicles. Here are the key highlights of Hyundai’s warranty coverage:
- Comprehensive Limited Warranty: 5 years/100,000 km
- Powertrain Warranty: 5 years/100,000 km
- Emission Warranty: 8 years/130,000 km
- Roadside Assistance: 5 years/unlimited km
- Hybrid/Electric System Warranty: 8 years/160,000 km
- Anti-perforation Warranty: 5 years/unlimited km
New Car Smell and Modern Conveniences
The Hyundai Sonata is a great example of the novelty a new car brings. Compared with the older infotainment screens in older Hyundai make (and most other makes), these features are incredibly eye-catching to our customers.
Our customers at Country Hills Hyundai very much enjoy the experience of shopping for a new car. If you've never done it, or if it's been many years—let’s not forget the simple pleasures of driving off the lot with a new car:
- that unique new car smell that tickles the senses.
- Larger screen-size infotainment systems that keep us connected.
- the advanced driving aids that make cruising a breeze.
Modern conveniences, from touchscreen displays to voice-activated features, turn a simple drive into an experience, making a new car more than just a means of transportation. As our sales advisors can tell you, these simple pleasures are almost a job perk at this point!
Comparing Total Cost of Ownership: New vs. Used
The tug-of-war between the shiny allure of new cars and the frugal charm of used cars is not just about upfront costs; it’s a marathon of expenses over time.
Through the lower initial purchase price of used cars, you've got more money to go to principal, perhaps even enough to buy outright; on the other hand, is more peace of mind early on with the lower long-term costs of newer cars.
To truly understand which benefit wins in the long run, let's look beyond the sales tag and consider car prices in terms of insurance, maintenance, and the inevitable depreciation. We can better evaluate this competition by examining a few case studies.
Case Study: Hyundai Elantra
A quick look at our used Elantra inventory shows multiple models with a great price tag. A used SEL from the early 2020s, still under warranty with around 36,000 km can go for over $27,000. On the other hand a new one with all the latest features the Elantra has to offer costs more. Contact us for a price!
It costs about $7,702 CAD to maintain the Elantra for 10 years. In that time, you get an amazing car with some of the best vehicle warranty in the country! Much of the cost comes after the first 5 years' warranty, and after 8 years' emissions warranty.
Case Study: Hyundai Sonata
The Hyundai Sonata cuts impressive lines, and it's one of our sales' advisors favourites for many reasons. Our customers find it quite reliable too!
Let's take the same look at our used Sonata inventory showing multiple models with a decent price tag. A used Sonata from the early 2020s, still under warranty with around 20,000 km, might go for $30,000 or more. On the other hand, a new one is a bit pricier. Contact us for exact figures!
It costs about $7,844 CAD to maintain the Sonata for 10 years. In that time, your Sonata, custom to your tastes, comes with some of the best vehicle warranties in the country! Much of the cost comes after the first 5 years' warranty, and after the 8 years' emissions warranty.
The Impact of Repair Costs
While the initial price of a used car might be music to your ears, repair costs can quickly turn that tune sour. The savings you pocket at the dealership could very well trickle away with each trip to the mechanic.
A proactive approach? Establish a repair fund for maintenance and repairs, so you’re never caught off guard by the costs that come with older cars.
Is Buying an Electric Vehicle Worth It?
With the winds of change blowing internal combustion engine (ICE) engines towards greener pastures, electric vehicles (EVs) are taking the spotlight. Their surge by 2.3% of Canadian sales in recent years, up to a hearty 3.0% of all light-duty vehicle sales in 2022 speaks volumes of their growing appeal.
But with the higher upfront costs, limited driving range, and the anxiety of finding a charging station, are they truly the future of motoring, or just a fad riding on the waves of environmental consciousness? We should examine the facts to determine if an EV is compatible with your lifestyle and budget.
Long-Term Savings on Fuel Costs
The Hyundai Ioniq 6 is fully electric, which can get you moving on electrity without a reliance on stable petroleum costs from gas retailers. With great range, there's a lot of range to take you anywhere around southern Alberta you need to go!
The upfront cost of an electric vehicle might give you pause but consider the long game where fuel savings can be substantial. As electricity generally costs less than gasoline, and EVs like the Ioniq 6 go 487 km on a charge, the savings could ease your budget over time.
While you might miss the familiar hum of a gas engine, your wallet will thank you for the quiet efficiency of an electric motor. Plus, Hyundai's warranties are some of the best, and that goes double for EVs. Check out the exciting Tucson plug-in Hybrid to for the brave new world of hybrid fuel savings!
Resale Value and Market Trends
In the fast-paced world of technology, electric vehicles are not only holding their value but, in some cases, are becoming the stars of the resale market. As the public plugs into the environmental benefits and long-term savings, EVs are starting to look more like investments than expenses, potentially offering a return when it’s time for an upgrade.
Financial Considerations and Tips for Car Buyers
Before you speed off into the sunset with your new (or new-to-you) car, consider the full financial picture. From the taxes and fees that come with your shiny purchase to the insurance and maintenance that follow, every aspect needs to be accounted for. Our customers often find that financial considerations and tips alleviate financial stress and save them money in the long term.
Budgeting for Your New Car Purchase
The Tucson is an impressive vehicle, and whether you opt for petroleum models or a plug-in hybrid like the one pictured, you can save a lot on gas, while balancing it with electricity to charge the battery.
The first step in the car buying process is to set a realistic budget, taking into account your income, expenses, and the inevitable liabilities that come with car ownership.
Adhering to the 20% rule—where your car payment doesn’t exceed 20% of your monthly take-home—can keep your finances running smoothly without unexpected breakdowns. And if you can, stashing a little extra cash away each month will give you a head start on your next car purchase too. Combined with savings, resale value gets you into a new car for cheaper. At Country Hills Hyundai, we can trade!
Understanding Loan Terms and Monthly Payments
Loan terms can stretch from two to six years with fluctuating interest rates. A keen eye on auto loan rates will help you understand how an increase can affect your monthly payments and the total cost of your loan.
Remember, a longer-term may mean smaller monthly payments, but it also paves the way for more interest paid over time. If you can, consider the option to pay cash to avoid interest. Nevertheless, many Country Hills Hyundai customers gladly pay a little interest to take home their next vehicle, thanks to Finance!
Saving Money with Car Shopping Strategies
Even in the car market, timing is everything. Strategically planning your car purchase for the end of the month or during sales events can give you leverage when negotiating a better deal. Keep an eye on our new promotions and used car specials, whether for new or used to stay on top of our inventory; time the sales!
When Buying a New Car Makes Sense
Hyundai's Elantra and Tucson were awarded TOP SAFETY PICK status by the Insurance Institute for Highway Safety in recent years! If you buy an award-winning car new, you'll benefit a lot.
There are times when the allure of the showroom is more than just a flight of fancy. If your bank account allows, then buying a new car known for world-class safety can be a sound decision. A car is an asset; sure, it depreciates no matter what, but a good car like a Hyundai holds tremendous value over time.
Whether you’re a tech enthusiast craving the latest features or someone with long-term ownership in mind, there are scenarios where the investment in a new car can be justified. We should consider a few scenarios where purchasing a new vehicle may be the correct decision.
If You Are Financially Independent
For the financially independent, the roads are wide open. With the flexibility to manage a new car purchase without disrupting other financial goals, it can be enticing to opt for a vehicle fresh off the production line.
Enjoying a new car becomes a pleasure rather than a burden, as it doesn’t impose on your financial stability or future savings.
Seeking Advanced Technology and Features
In an age where technology reigns supreme, buying a new car can feel like stepping into the future. From the latest safety systems to biometric features, new cars offer a level of technological sophistication that older models struggle to match.
If staying connected and protected on the road with the newest innovations is your priority, then a new car might just be your ticket to the fast lane of automotive evolution.
Long-Term Ownership Plans
If you’re looking for a long-term companion rather than a fleeting fling, a new car may make financial sense. When you plan to keep your new and used car for a decade or more, concerns about depreciation fade into the rearview mirror, and you can begin to appreciate the lower maintenance needs and the reliability that comes with a brand-new set of wheels.
This long-term relationship with your vehicle can lead to significant savings over time, making the initial investment well worth it. But timing it might still be a good idea. If you're waiting for the right time, you should keep an eye on our new car promotions!
Common Misconceptions About New Cars
Navigating the car-buying process can often be clouded by myths and misconceptions. Here are some common misunderstandings our sales advisors help customers new and established overcome simply by talking it out:
- New cars are a financial sinkhole thanks to depreciation.
- Used cars are always a better deal.
- Buying a car is a one-time expense.
- Your ideal car is going to be obsolete in one year.
- Financing is a bad idea because it's debt.
By demystifying these common misunderstandings, we can steer clear of costly mistakes and make choices that align with our financial and personal needs. We should clarify a few of these common misconceptions that our customers coming through Country Hills might have.
High Maintenance Costs of Used Cars
A used Palisade off our lot won't cost you as much as other vehicles, and you could do a lot worse in the hunt for used vehicles! This model is trustworthy and reliable, so it retains value for used car resale.
The age-old tale that used cars are bottomless pits for repair bills is not entirely accurate. While it’s true that older vehicles may require more attention, many Hyundai models are surprisingly resilient, offering scheduled maintenance costs that rival those of their newer counterparts. With a well-maintained used car, the fear of prohibitive upkeep costs can often be put to rest.
The Myth of Severe Depreciation
The belief that a new car loses its value the second it leaves the lot is a generalization that doesn’t always hold up. While a new car does depreciate, mostly in its first month, not all models nosedive to the point of worthlessness. In fact, some Hyundai cars have awards from Canadian Black Book for their ability to retain value, which can make them a much smarter buy than they’re often given credit for.
Choose Between Delightful New or Used Cars at Country Hills Hyundai
We’ve navigated the winding roads of car ownership, from the initial shimmer of new cars to the seasoned charm of used vehicles. We’ve debunked myths, highlighted financial strategies, and considered the unique advantages of EVs.
Whether you’re driven by the latest tech, a desire for financial prudence, or the simple joy of a pristine ride, the journey to the right car is as personal as the destination. If you're still wondering which of our OEM's amazing lineup to trust in, check out the reliable Hyundai Kona for a new car that lasts.
A test drive at Country Hills Hyundai is a must in the car-buying process, allowing you to experience firsthand how both a new and used vehicle handles, its comfort level, and whether it meets your expectations. Come talk to us before making a final decision!