When it comes to buying a new vs second hand car, there are certainly a medley of pros and cons attached to either option – so what do you need to know?
Whether it’s your very first set of wheels or that bucket list convertible, buying a car is a big deal and not generally a purchase that rolls more than a handful of times for most Australians. While there are advantages and disadvantages for both types of vehicles, the answer will ultimately depend on what kind of car you had in your sights, and how much you’re willing to pay for it.
A Case For Buying A Brand New Car
Pro: Peace Of Mind – Peace of mind is everything when shelling out thousands of your own money, and life’s already stressful enough without having to worry about the reliability of your new set of wheels – especially when they come with a warranty.
Pro: Technology – Are you the type to like bells and whistles? Brand new vehicles come with all the perks of modern day technology, including anything and everything from car safety systems, infotainment and driver assist systems – not to mention engine efficiency.
Con: Depreciation – A simple fact of life is that brand new cars depreciate in value much more quickly than used vehicles. If your monthly loan payment isn’t high enough to compensate for depreciation, you could end up owing more than the vehicle is worth.
Con: Limited Servicing Options – Many dealerships have strict conditions as to who can service your car if you want your warranty to stay valid, which can mean paying a premium or extra travel to the dealership just for a service.
A Case For Buying A Second Hand Car
Pro: Negotiation – Purchasing a used vehicle directly from it’s previous owner or even a dealership means more bargaining power. You could potentially save thousands for a cash payment, a year’s worth of road registration, or even request a service before purchase.
Pro: Choice – You may find that the new car you’re looking for is pretty similar to last year’s model, however the latter will come at a significantly reduced price and only have a low amount of kilometres on the odometer – there’s plenty of choice in the used car market.
Con: Ongoing Costs – Ongoing costs may well be more expensive since you’re servicing an older car with more tired parts. You may also need to shop around and find a trustworthy mechanic who has the right experience to work with an older vehicle.
Con: The Element Of Surprise – While things can go wrong with all cars, if you’re purchasing a used vehicle it’s most likely older and could have a more colourful history than you might think. Always get a mechanic to double check your potential purchase to avoid any surprises.
Have You Got Your Finance Sorted?
One of the most common traps that shoppers fall into when buying a new or a second hand car is committing to a car loan on a whim or out of panic. These often have much larger interest rates that are designed to take advantage of excited shoppers who are eager to “seal the deal” quickly, so that they can drive away with their new set of wheels. Thankfully, there is a Plan B.
Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 1700 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, George takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it. Although regarded as one of the top mortgage brokers in Queensland, did you know that they also offer a comprehensive range of car loan broking solutions too?
Whether you’re weighing up buying a new vs second hand car, Madd Loans can help to identify your personal profile and preferred loan option before matching it with the best solution on the market. To discuss your car finance options, please get in touch with the team at Madd today.
