Buying a used vehicle can be daunting. From depreciation to sketchy car salespeople (some, not all), motor writer Greg Williams gives us 6 tips for buying a used car.
One wouldn’t think buying a new car would lead to someone becoming depressed. But a study commissioned by Kijiji Autos suggests otherwise. In fact, they’ve coined a new term to describe the issue: Depreciation depression.
“It’s a pretty interesting subject,” said Scott Neil, head of Kijiji Autos in Canada. “No one else in the market was looking at it.”
The online advertising site, which helps private sellers and dealers alike market pre-owned vehicles to millions of Canadian buyers, decided to investigate why people choose to purchase used. They also wanted to understand how vehicle buyers felt about new vehicle depreciation. An Ipsos Reid poll conducted in September surveyed more than 1,000 Canadians, all who were asked about vehicle depreciation.
“We wanted to find out what people knew about depreciation, and how it made them feel,” Neil said.
Depreciation, simply put, is the loss of a vehicle’s value over time. And, according to the research, nine out of 10 Canadians acknowledge a new car loses about 15 per cent of its value the moment it leaves the dealership lot. Some buyers would seem to be OK with that figure, happy to be the first owner of a brand new vehicle – and enjoying the entire experience. Others, however, view the experience entirely differently. According to the Ipsos Reid poll, 30 per cent feel annoyed by depreciation, 18 per cent feel sad, 16 per cent feel upset, 8 per cent feel mad about it, and six per cent get depressed.
So, if buying new is a depressing thought, the option is buying used.
According to the survey, when looking at expenses such as maintenance, insurance and vehicle payments, a buyer could expect to save about $114 a month buying used as opposed to new. And, not all vehicles depreciate as quickly or as much as others. For example, Neil suggested that there is a perception that domestic automobiles depreciate more rapidly than imports. In some cases, that’s not true. Cars with lower rates of annual depreciation, measured between 2010 and 2011, included a 2010 Cadillac Escalade at six per cent, while a 2008 Honda Pilot was at eight per cent. Both are respectable figures, and a lower number is always better.
According to the Ipsos Reid poll, 30 per cent feel annoyed by depreciation, 18 per cent feel sad, 16 per cent feel upset, 8 per cent feel mad about it, and six per cent get depressed.
Vehicles that depreciated the least include the Cadillac Escalade, as well as model year 2007 BMW X3 at five per cent and 2000 Buick Century at eight per cent.