Cars.. Buy New, Gently or Lease

Buying a car is widely accepted as the worst investment that you can make. I tend to agree with that sentiment and have always assumed the best bet would be to hold off on purchasing a vehicle for as long as possible.

My partner brought a car into our relationship many years ago and it is that same car that we drive today. It’s a nice little 4 door hatchback and it has served us quite well. The vehicle is going on its 11th year and is sitting at 120,000km. One of the best things about this vehicle is no car payments 😆.

While living in the city I appreciate having a smaller vehicle being highly manueverable and being able to scoop up the tight parking spot that SUVs and trucks cannot fit into.

Our family is pushing us towards getting something new and we would like a larger vehicles for trips. With that being said I want to hold off as long as possible. Two weeks ago we renewed our Mortgage and this month is our final tab payment on both of our phones. So it will be nice to build a bit of a buffer back up and I want to focus on getting our TFSA’s built up as fast as possible to take advantage of compounding.

Before I dive into the price differences I did a little digging to see what the consensus was for advantages to the three paths ahead:

Buying New Advantages

• Latest and greatest of features (assuming their are noticeable differences in the newest release)
• Predictable payments
  • New cars generally come with decent warranties so if something does happen then it is likely covered
• Typically can get lower interest rates on a new car vs a used car
• Should have the latest in safety features for yourself and your family
• Fuel efficiency
  • Generally overtime manufacturers focus on comfort and fuel efficiency improvements

Buying Used Advantages

• Pay less up front which compounds when you calculate sales tax
• You get to offload the steep upfront depreciation to whomever bought the car brand new
• You may be able to get more car then you otherwise would have been able to afford.
  • Ex/ Maybe you can buy the base model on this years but the fully loaded model from last year
• Lower insurance costs on older used vehicles
• Cars on average are more reliable than they used to be so less risk buying a gently used vehicle

Advantages to Leasing

• Don’t need to put a down payment
• Always driving a new vehicle
• Still get the warranty
• Can still buy it at the end of the term, whether it’s worth it depends on a few factors
  • Mileage
  • Demand for the vehicle

Leasing is essentially only paying for the depreciation of the vehicle before giving it back

Looking into the financial side

Option	Vehicle	Sticker	Weekly	Interest	Total Cost
Buying New	2025 CX-50 GS-L	$43,437	$146	5.95% for 84-mos	$53,144 (84/1252$146)
Leasing	2025 CX-50 GS-L	N/A	$131.5	5.45% for 60-mos	$34,190 (60/1252$131.5)
Used (8500km)	2024 CX-50 GS-L	$38,955	N/A	Maybe	$38,955 + Any interest
Used (33011km)	2023 CX-50 GS-L	$37,998	N/A	Maybe	$37,998 + Any interest

Now I’m sure you could shop around for rates but to keep it simple I decided to use the posted amounts and rates straight from Mazda Canada’s website.

First thing is I’m surprised at how little you seem to save buying used over new:

• The 2024 option is 90% of the cost of the new version
  • honestly I was thinking I would have seen about 80% of the price but this is a ver lightly used demo model
• The 2023 option is 87.5% of the cost of the new version
  • I’d definitely pass on this one as it has 4x the mileage of the 2024 with barely any savings

There is also the option of going outside of the dealership and potentially getting an even better deal but to keep this comparing apples to apples I will leave it at these few examples.

While we are going to wait until at least the fault it never hurts to take a look and plan for the future.

One thing I can say is that I would not take the leasing option as paying 78.7% of the sticker price and giving the car back after 5 years does not appeal to me.

I hope you enjoyed my overview of the 3 options and will really dig into the research if and when you go to buy your next vehicle.

Thanks for reading, I hope to see you back here next week!

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