Should I Buy a New or a Used Car?

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Whether you choose to buy a new or a used car, a vehicle is one of the larger purchases you will ever make. Whatever your decision, a CIBC advisor can help you find the right product to fund your new or used car purchase.

If you've already chosen a vehicle and prefer a structured payment plan, a CIBC Personal Car Loan offers flexible repayment terms and amortization periods of up to 8 years. If you haven't decided on a car, but want a pool of funds to draw on, a CIBC Personal Line of Credit may be a more suitable choice.

Additionally, home owners with equity in their home can secure a lower interest rate and more borrowing power with a CIBC Home Power Plan®.
 

Pricing and budget considerations

When budgeting for a vehicle, it's important to note the substantial price difference between a new car and a comparable used one. By the time a car is 2 or 3 years old, the previous owner will have already absorbed most of the vehicle's depreciation value, which translates to a better deal for the used car buyer.

On the other hand, a new car will be covered by a manufacturer's warranty. New cars also require fewer repairs than even the most reliable used vehicle.

A CIBC car loan can fund up to 100% of the purchase price of your new or used car. By paying cash, you may be able to secure a better deal, or get a cash rebate. Either way, paying up front could help reduce the loan amount, and the amount of your monthly payments.

To get an estimate of what your monthly car loan payment will be, try the CIBC Car Loan Calculator. Once you've got an idea of what you can afford, talk to your CIBC advisor for more information.
 

Used car buying tips

The second-hand car market offers a broad range of models and options, but it still pays to know what to look for.

  • Always inspect a car in the daylight
  • Check for wear on the upholstery, seats, brake and accelerator pedals. If the car is older, new pedals may be an indication that the car has had a lot of use
  • Look closely at the exterior for any deviations on the body, and ask about the vehicle's accident history. Where possible, get a written summary of any accident details
  • Take a road test to evaluate the steering, brakes etc.
  • Take the vehicle to your mechanic for a check-up before buying
     

Car buyer resources

  • View publications that list values for cars in Canada
  • The Automobile Protection Association
  • The Automobile Consumer Coalition
  • The Canadian Automobile Association
  • Used Car Vehicle Information Package (Ontario only)