Automotive

Need advice buying used vs new car

  • Last Updated:
  • Jul 25th, 2020 5:50 pm
[OP]
Newbie
Aug 4, 2015
14 posts
7 upvotes
Mississauga, ON

Need advice buying used vs new car

Disclaimer i am not a car person so please explain like I'm 5 and this is my FIRST CAR.

Hey all as title suggest I'm looking to buy a car as its long overdue. Been looking on auto trader for a decent car. I have $5000 for downpayment and looking for financing a car over the course of 7 years ( 84 months ) for roughly 80-110 bi weekly.

I have found:
* a Hyundai Elantra 2017 for 13.5k for $95 bi-weekly
* a Hyundai Elantra 2020 ( directly from dealership ) which would come out to be $110 bi weekly which is what im leaning
towards considering its brand new, more features, longer warrant and better resale value. The new one also has 0%
financing option on their website so i was thinking it might be better to go this route for not much more per month.

I had a friend who told me about invoice pricing, and negotiation tactics. I guess im looking for some help on how much I should be spending and what is most optimal / things to look out for.

thanks in advance!!!
37 replies
Deal Expert
User avatar
Jul 30, 2007
31741 posts
18659 upvotes
Toronto
First car ....

I suggest:
- shop for insurance first to ensure you are not going to be shocked

- used cars without warranty can bring some headaches as there could be many issues which could lead to pricey repairs. Like you don’t know how past owner (s) had treated the car and did the car have many unresolved issues to begin with.

If you do go with used, then due diligence is required. You will need carfax report, finding out if car has lien on it and any hidden accidents repair that could have been done incorrectly

- getting new could be better for peace of mind perhaps for first time owner. Any issues would be dealt with at the dealership level. The down side of getting new would be cost, of course.
[OP]
Newbie
Aug 4, 2015
14 posts
7 upvotes
Mississauga, ON
I have insurance as i drive my parents car, and sorry I forgot to mention that the used car is accident free. If i were to go that route it would be checked by hyundai before purchasing to make sure everything is cleared. However I realized that the dealer gave me a ridiculous 6.99% rate even though my credit is damn near 800 which doesn't make sense to me. I calculated the cost on the official website for a 2020 model and it actually turned out to be cheaper to finance bi-weekly than the used 2017 car by $3. This is before negotiations

starting to think this is a no brainer.
Last edited by JLIVE101 on Jul 21st, 2020 7:07 pm, edited 1 time in total.
Sr. Member
Sep 15, 2017
745 posts
783 upvotes
Inspections on used cars rarely if ever delve into motor/transmission internals, so it being accident free is only a minor aspect. You have zero idea how it was driven or maintained unless you knew the person and had all the service records. I'd shoot for new and have the peace of mind of knowing where its been and warranty coverage.
Deal Expert
User avatar
Jul 30, 2007
31741 posts
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Toronto
But getting your own insurance is different as you would be on your own as primary not secondary driver.
Deal Addict
May 2, 2017
1408 posts
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JLIVE101 wrote: I have insurance as i drive my parents car, and sorry I forgot to mention that the used car is accident free. If i were to go that route it would be checked by hyundai before purchasing to make sure everything is cleared. However I realized that the dealer gave me a ridiculous 6.99% rate even though my credit is damn near 800 which doesn't make sense to me. I calculated the cost on the official website for a 2020 model and it actually turned out to be cheaper to finance bi-weekly than the used 2017 car by $3. This is before negotiations

starting to thing this is a no brainer.
Used cars you often pay a much higher interest rate on than new. It's pretty normal. It's often better to go to your bank directly for a loan or line of credit rather than go with the dealer used car financing.

Are these numbers you are quoting inclusive of tax, and the same term (84 months)? Is freight/PDI included on the 2020? What about the dealership admin fees?

Its usually best to look at the total out the door price of both, including the cost to finance. That number divided by your number of payments will give you your monthly payment. So assuming your terms are the same, 84 months bi-weekly payments, I think you'll find the cost of financing is going to be what is bringing the cost of the used one way up. 6% a year is a lot of interest you'll be paying. In that scenario, the new one is obviously the better deal, as you'll have full warranty for a few years, higher resale value, etc.
Deal Expert
User avatar
Jul 30, 2007
31741 posts
18659 upvotes
Toronto
If you do decide to go new, you can pm @RFDBRIAN as he used to be a Hyundai sales guy (now he’s at Oakville Honda) and he can guide you through what is a good/fair price to pay nowadays.

Even if you are from another region, I believe he may be able to connect you to his contact of that region.
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May 18, 2002
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Brampton
I am guessing the new car term is 84 months while the used car is more like 60 months?
INFORMATION: The requested thread does not exist.
[OP]
Newbie
Aug 4, 2015
14 posts
7 upvotes
Mississauga, ON
Thanks for replies guys,

so I used the calculator on the dealership website but I don't think it includes the total out the lot fees and everything. I messaged them to give me a quote of the total price.

New car is financed for 96 months ( 8 years ) at $83 bi weekly with 5k down. The extra year doesn't bother me as that's only 1000 over a year. The peace of mind is huge still and considering I'd be able to pay it off at anytime which I plan on doing sooner makes it ok.

Used car if I finance it with the dealer is 84 months ( 7 years ) at $89 with 5k down. The dealer messaged me back and said he could drop the rate to 4.99% which would come to the price I've mentioned above with the additional warranty. If no additional warranty than it'd be $83 by weekly.

I'm definitely gonna reach out to the user you've mentioned thank-you so much. I live in Mississauga which isn't far from Oakville so hopefully he has connections lol.

I also do have to get insurance but that isn't an issue for me and I've already came to terms with paying whatever I need to for it. My cousin also recommended just getting a broker to find the cheapest insurance for me which I plan on doing so that wouldn't really alter my decision in terms of my car purchase.
Member
Dec 28, 2017
402 posts
175 upvotes
Burlington
According to the Hyundai Canada website, it is offering 0% financing and 6 months interest free deferral on payments.

Also.. the 2021 Elantra is remodeled and looks alot better than 2020 model. Interior, exterior, and features are much better.

You might want to hold on to your purchase.

As for insurance.. call around and ask. It doesn't have to be with your parents insurance company. Just remember, if it's not under the same policy, then you can't drive their car and they can't drive yours .
Deal Addict
Dec 16, 2008
1065 posts
475 upvotes
Richmond Hill
You likely will be out of car's 60 month warranty period with such long financing durations.
Deal Addict
Jan 28, 2017
1067 posts
1182 upvotes
OP I'd think twice about doing 8 year financing. 8 years is a long time and a lot of things can change. Need to look at total out the door cost (inclusive of tax, fees, interest costs) to get complete picture.

Have you shopped around different competition (Civic, Corolla, Mazda3, etc.)? Insurance rates would vary too and could affect your decision.
[OP]
Newbie
Aug 4, 2015
14 posts
7 upvotes
Mississauga, ON
I tried looking at civic, corolla and none of them appealed to me like the Elantra. I'll double check and take a look at mazda 3 but I think I checked that as well. I plan on paying off the car before 8 years for sure, I just want the extra cash from my income to be funnelled into my investments instead. Thats why I don't plan on financing for a shorter period of time. As long as theres no fee for prepaying than I'll go with this option.

As for putting up a bigger downpayment, I can do that but I'd also like to have more money in my investments now due to the economic downturn that is bound to happen. ( at least thats what people keep saying ). I want to profit as much as possible off of my investments and I need to be able to keep as much as i can in now..

As I've mentioned before, insurance rates are not a problem for me as im a 26 yo male with no bad history. Regardless of the price of insurance it needs to be paid and I'll find the cheapest one i can.
Deal Addict
Sep 3, 2005
3317 posts
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Vaughan
JLIVE101 wrote: As I've mentioned before, insurance rates are not a problem for me as im a 26 yo male with no bad history. Regardless of the price of insurance it needs to be paid and I'll find the cheapest one i can.
You do realize that your insurance could possibly be, and most likely be more than what you're paying for your car right? Insurance could be double, triple, or quadruple or more when compared to your monthly payments. I wouldn't be surprised if they were.

If you're ok with that, carry on. Just don't assumre insurance is going to be cheap because you have a good driving record. There are many other factors that affect your insurance rates.

Everyone is telling you to check insurance rates because most of us have gone through it. You think insurance can't be that bad, and after you signed the car agreement, but then can't afford the insurance. It would be wise to take everyones advice to check insurance rates first.
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Member
Dec 28, 2017
402 posts
175 upvotes
Burlington
Being a secondary driver doesn't add inaurance rate much as all the liabilities goes to your parents. If you crash the car.. it's on your parents policy as they are primary . The rate is based on your parents

If you are a primary driver, the insurance rate is calculated based on you. And it is calculated as you are the primary.. it's different than being secondary.

On the other hand, if you have 3 ppl in family and currently only have one car... You can ask one of your parent to be the primary driver and have the car under your dad or mom name. You will get a lower rate that way .
Sr. Member
User avatar
Mar 23, 2009
936 posts
297 upvotes
Halifax
JLIVE101 wrote: I tried looking at civic, corolla and none of them appealed to me like the Elantra. I'll double check and take a look at mazda 3 but I think I checked that as well. I plan on paying off the car before 8 years for sure, I just want the extra cash from my income to be funnelled into my investments instead. Thats why I don't plan on financing for a shorter period of time. As long as theres no fee for prepaying than I'll go with this option.

As for putting up a bigger downpayment, I can do that but I'd also like to have more money in my investments now due to the economic downturn that is bound to happen. ( at least thats what people keep saying ). I want to profit as much as possible off of my investments and I need to be able to keep as much as i can in now..

As I've mentioned before, insurance rates are not a problem for me as im a 26 yo male with no bad history. Regardless of the price of insurance it needs to be paid and I'll find the cheapest one i can.
OK, it seems you have everything you need. Good luck.
[OP]
Newbie
Aug 4, 2015
14 posts
7 upvotes
Mississauga, ON
Seanhfx wrote: OK, it seems you have everything you need. Good luck.
Thanks man!
Deal Addict
Aug 10, 2013
2791 posts
2023 upvotes
Buy a $4000 vehicle. Take the $1000 and put towards inspection and any necessary repairs. Can get get plenty of good cars out there and keeps you out of a depreciating debt
Smash that like button!
Deal Addict
May 2, 2017
1408 posts
1919 upvotes
JLIVE101 wrote: New car is financed for 96 months ( 8 years ) at $83 bi weekly with 5k down. The extra year doesn't bother me as that's only 1000 over a year. The peace of mind is huge still and considering I'd be able to pay it off at anytime which I plan on doing sooner makes it ok.

Used car if I finance it with the dealer is 84 months ( 7 years ) at $89 with 5k down. The dealer messaged me back and said he could drop the rate to 4.99% which would come to the price I've mentioned above with the additional warranty. If no additional warranty than it'd be $83 by weekly.
If you look at your total costs, assuming those numbers you gave are "all in", $22,264 for the new one or $21,198 for the used one ($20,106 without warranty).
Better negotiate aggressively on the used one if that is the price they're quoting you. Not really a compelling price.
Deal Addict
Jul 8, 2013
2671 posts
4146 upvotes
Red Deer, AB
JLIVE101 wrote: Disclaimer i am not a car person so please explain like I'm 5 and this is my FIRST CAR.

Hey all as title suggest I'm looking to buy a car as its long overdue. Been looking on auto trader for a decent car. I have $5000 for downpayment and looking for financing a car over the course of 7 years ( 84 months ) for roughly 80-110 bi weekly.

I have found:
* a Hyundai Elantra 2017 for 13.5k for $95 bi-weekly
* a Hyundai Elantra 2020 ( directly from dealership ) which would come out to be $110 bi weekly which is what im leaning
towards considering its brand new, more features, longer warrant and better resale value. The new one also has 0%
financing option on their website so i was thinking it might be better to go this route for not much more per month.

I had a friend who told me about invoice pricing, and negotiation tactics. I guess im looking for some help on how much I should be spending and what is most optimal / things to look out for.

thanks in advance!!!
Getting a new one at a much lower interest rate is indeed a no-brainer.

Which trim level are you looking at? Once you tell me this, I'll be able to tell you what bi-weekly price you should aim for with the $5,000 down payment.
Be Balanced. Be Diversified. Stay Invested.

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