The pros and cons of buying new and used cars
The pros and cons of buying new and used cars
You’re ready to upgrade your wheels or say goodbye to public transport and hello to the open road via car ownership. But what kind of car will meet your needs and fit within your budget? Your next big decision is to weigh up the pros and cons of buying a new car versus buying a used one.
Buying a new car
There’s just something about owning a new car that’s hard to beat. Apart from that distinctive ‘new car smell’, a new vehicle brings a huge amount of pride from knowing that it hasn’t been driven by anyone else and was personally selected by you for its colour, interior décor and features.
Mind you, getting your hands on a new car may take a little longer than usual, with the pandemic disrupting global deliveries of vehicles to dealers. But is a new car worth the worry of borrowing more money, not to mention keeping it in immaculate condition free of scratches? Here are some pros and cons of buying a new car:
Pros of buying a new car:
- New cars usually bring greater peace of mind when it comes to mechanical reliability. Warranties often provide cover for up to five years or 100,000km should anything go wrong.
- Enjoy all the latest driver safety and comfort technology, as well as all the new infotainment and connectivity gadgets that deliver a better driving experience.
- Unless you’re buying a ‘demonstrator’ model, a new car gives you greater choice of exterior colours, interior finishes and features. This can be a huge factor, particularly if you love unusual colours, leather seats and that heated driver seat option.
- If you’ve spent a few more dollars on a new vehicle, the good news is they usually come with better fuel efficiency that can save you money on running costs. They’ll also output lower CO2 emissions which is better for the environment.
Cons of buying a new car:
- New cars will cost you more upfront – those high-tech features and optional extras can really add up. Plus, there are dealer delivery costs, as well as additional on-road costs, taxes and charges that can usually be avoided buying a second hand vehicle. Don’t forget, that you may have to wait longer to collect your new car due to delivery delays from the pandemic. Dealer finance may often look appealing with low interest rates, but they also come with hidden costs and a large balloon payment after a few years.
- As soon as you drive out of the dealership, you’re losing money on the value of your car through depreciation. In fact, motoring group RACQ found that new cars can lose up to 40% of their value in the first three years.1
- Servicing your new car can also come with a few hassles. Keeping your new car warranty valid may require you to service the vehicle more regularly and with the dealer you purchased from – which can be more expensive.
Buying a used car
Second hand cars can help you save a lot of money upfront. You could even pick up a model that does almost as much as the newest vehicles. However, they also come with a few risks worth considering.
Pros of buying a used car:
- The most obvious benefit of buying a used car is that may be cheaper to buy than a new one. We say “may” as delivery delays of new cars caused by the pandemic has seen second hand vehicle prices on some models rise over the past year. You have the opportunity to search online and drive away with a fully featured, well maintained and perfectly good vehicle. Plus, insuring a second hand vehicle is usually less expensive than covering a new car. If you have something picked out, you should start researching insurance costs.
- If you buy a car that’s more than three years old, the drop in value from depreciation won’t be as steep as a new vehicle. Some older ‘classic’ models may even rise in value if restored and well maintained.
- Choice can be almost unlimited. Online car sales websites and apps allow you to search for and connect with thousands of private sellers who have cars of all different makes, models and condition. Of course, you can still buy through a used car dealer, but do some research on their after sales service. There’s also the choice of where you service your vehicle, which could save you money.
Cons of buying a used car:
- Unlike a new car, knowing the history of a second hand vehicle will usually remain a bit of a mystery. You‘ll unfortunately never know with certainty how carefully the previous owners have driven the car.
- While it may be cheaper to buy upfront, you may have to compromise a little on some of the latest driver technology, or possibly even safety features if it’s a very old car.
- Running and maintaining a second hand car could be more costly than a new car, as it may not offer the latest fuel efficiency features. Depending on the model and age of the vehicle, replacement parts may also be difficult and expensive to buy.
Whether you buy a new or used car can be a personal choice. Your decision may come down to a range of factors including budget, key features and the amount of time you’re prepared to research the make, model and dealer.