The debate over whether it’s smarter to buy a vehicle new or used will never end. Used-car proponents cite depreciation-related savings and the fact that pre-owned cars come with fewer fees added to their prices. Meanwhile, the peace of mind of a full manufacturer’s warranty plays most heavily in favour of a new car.
But like so many life decisions, the used-versus-new debate is not black and white, as used-vehicle savings vary from model to model. The auto industry researchers at iSeeCars have put together a study that looks at the vehicles it thinks are best bought new and those that make smarter used-vehicle purchases. We’ve compiled the top five models from each side of the ledger for you here.
Top Five Vehicles To Buy New
There are different reasons why some cars are better to buy new than used. In some cases, a vehicle’s strong reliability and low cost of ownership help it retain value, making it hard to find deals on used versions. For other models, generous incentives cut the price for new versions so dramatically it’s not worth shopping for a pre-owned model. There’s a lot of variety in iSeeCars’ list of the top five vehicles that are better to buy new, which is topped by a high-profile electric car.
Tesla Model 3
Electric vehicles (EVs) are rising stars in the auto industry due to continually improving battery technology and public charging infrastructure becoming more widely available. Government rebates on green vehicles are also helping to drive EV sales. Because those rebates vary widely between jurisdictions, iSeeCars says it used the Tesla Model 3’s pre-rebate $55,990 MSRP to calculate the car’s 5.5 per cent rate of depreciation. That works out to a loss of just $3,100 in resale value after one year on the road. Another factor is that EV purchase rebates are most generous for new models and may not be available on used models.
Ford Ranger
The Ford Ranger’s estimated depreciation rate is 11.4 per cent in its first year, so it loses half as much resale value as its larger F-150 sibling. Chalk that up to Ford’s aggressive F-150 discounts (which help that truck maintain its best-seller status in Canada) and the up-and-coming mid-size truck segment that the Ranger competes in. The Ranger matches a 2.3L turbo four-cylinder (270 hp/310 lb-ft) with a 10-speed transmission and standard 4WD. Its one-year depreciation means a modest $3,600 discount compared to a new model.
Chevrolet Traverse
ISeeCars estimates that Chevy’s mid-size, three-row crossover model loses 11.7 per cent of its value after a year, which works out to about $4,100. The Traverse’s main appeal is its size, offering nearly full-size interior space with the car-like driving feel and economy for which the mid-size class is known. A standard 3.6L V6 makes 310 hp and 266 lb-ft, which goes through a nine-speed transmission. All-wheel drive is optional.
Honda Civic Hatchback
The hatchback version of Honda’s popular Civic drops about 12 per cent of its value in year one, a modest rate of depreciation for which you can thank the Civic’s reliability and practicality. If you shop for a one-year-old Civic hatch, you can expect to save about $3,000 compared to the 2020 model’s $24,190 starting MSRP. The Civic hatchback comes standard with a 1.5L turbo four-cylinder engine (174 hp/167 lb-ft) and a six-speed manual transmission.
Honda Fit
Honda’s other hatchback model, the Fit subcompact, occupies the last spot on iSeeCars’ list of top five cars to buy new instead of used. The only reason the Fit’s rate of depreciation is as high as 12.5 per cent is that subcompact cars are less desirable now than they were 10 years ago thanks to the rise of subcompact crossovers. Shop for a one-year-old Fit and you can expect to save about $2,000 off the hard-to-find DX trim’s 2020 MSRP, or about $2,500 off that of the better-equipped LX model. All Fit trims use a 1.5L engine (130 hp/114 lb-ft) and a six-speed manual transmission that options to a continuously variable automatic.
Top Five Vehicles To Buy Used
If you’re in the market for a luxury car, iSeeCars survey data show it’s a smart financial move to buy a one-year-old used model instead of a new one. The top 5 here are all upscale sedans, which are becoming a hard sell in today’s SUV-rich luxury marketplace. This result is no surprise, confirming what we’ve written in the past about luxury car depreciation.
BMW 7 Series
According to iSeeCars’ data, the BMW 7 Series could lose more than 43 per cent of its value after one year on the road. That’s a high rate of depreciation for any vehicle, but it’s particularly striking given the car’s $120,000 MSRP for the 2020 model year. That’s a sweet deal on a big, posh car powered by a 4.4L V8 (523 hp/553 lb-ft), an eight-speed transmission, and xDrive AWD.
Audi A6
Audi’s mid-range luxury sedan loses 41 per cent of its value in its first year, which works out to more than $25,000 of its 2020 MSRP. The A6 45 Progressiv comes standard with a 2.0L turbo four-cylinder engine (248 hp/273 lb-ft), a seven-speed transmission, and Quattro AWD.
Jaguar XE
The XE is Jaguar’s entry-level compact sedan, which competes with a variety of better-known upscale German and Japanese models. The iSeeCars research suggests the XE gives up just under 41 per cent of its value in year one. The XE’s standard configuration, at $49,900 for a 2020 model, uses a 2.0L turbo four-cylinder with 247 hp/269 lb-ft, an eight-speed transmission, and AWD.
Volvo S90
Volvo’s largest sedan comes in with a rate of depreciation just over 40 per cent, which knocks nearly 27 grand off the car’s 2020 MSRP of $67,000. The S90 boasts one of the most sophisticated powertrains in this group, with a 2.0L four-cylinder engine that is both turbo- and supercharged for 316 hp and 295 lb-ft. The eight-speed transmission is backed up with AWD.
BMW 3 Series
Number five on iSeeCars’ list of vehicles to buy used instead of new is the BMW 3 Series, a compact sedan known for being one of the most fun-to-drive upscale models on the road. A 38.2 per cent depreciation rate represents a nearly $19,000 discount on a 330i model with 255 hp and 295 lb-ft from a 2.0L turbo four-cylinder, an eight-speed transmission and xDrive AWD.