7 BIG Reasons Why You Should Buy a Used Car Instead of a New One...
If you are thinking of buying a car, your can basically choose between a new or used car.
In Australia, around 1.1 million new cars are bought each year compared to 2.5 million used cars and there were 19.5 million cars on the road in 2019 with an average age of 10.1 years.
With so much choice you might wonder which is better, new or used? Here are 7 great reasons why buying a pre loved used car is the way to go…
1. Drive away depreciation
If you were to buy a new car, keep in mind that the moment you drive it off the lot its value goes down by at least 10% right away. During the first 6 months of use, depreciation can be as much as 20% and after the first year your car could lose up to 30% of its value.
If you want to avoid a big loss as soon as you take ownership of your car, consider buying a one-year-old car, demonstrator or used car instead. Depreciation for a used car averages 15-25% per year depending on age and you should be able to buy and sell a car for a similar price within a 3 month window.
2. More variety
If you look at many of the new models on sale today, you’ll see that there’s not much to choose from. With only 350 models released each year and most manufacturers either owned by the same parent company or trying to copy each other, choices really are limited.
If you compare that with the number of used car models in the market, you’ll see there is no comparison. Additionally, many of the previously iconic models have either been discontinued, changed name or are completely unrecognisable from their original models.
Who can forget the classic Nissan Skyline R34, Mitsubishi Lancer Evolution VI or the now discontinued Nissan Cube.
3. Insurance costs are lower
For many car owners, insurance is a big factor to consider when shopping for a new ride.
And with about 40% of your insurance costs covering theft or damage, insurance costs will go up with the value of the car.
4. Reduced registration fees
In the same way that insurance for used cars is cheaper due to their lower price point, so are your registration fees. Most states will calculate registration based on car value however if you are in Victoria, a new or demonstrator will also be charged at a higher rate for the same valuation.
And if you are buying an expensive car, don’t forget the luxury car tax which is levied at 33% on cars valued at more than $60,316 whether new or used.
5. Uncover known issues with a vehicle history report
It’s difficult to buy a car when you don’t know what it’s been through. What if you end up with a ride that’s carrying hidden problems?
Thanks to companies like Carfacts and Carhistory, you can now buy used vehicle history reports. They take note of a car’s vehicle identification number (VIN) and provide reports including mileage verification, written off or damaged vehicles, finance obligations and outstanding recalls.
While new cars are supposed to come out of the factory with no issues, recent history would prove otherwise. Recent potentially deadly issues affecting new cars have included the Takata air bag recall, VW’s dieselgate emissions cheating scandal and Hyundai’s Veloster engine problems that could fail or catch fire.
6. Get a car worth your money to suit your budget
If you only look at branded dealerships that sell new cars, you might end up paying more than you can afford. Don’t fall for the “how much do you want to pay per week” trap and make sure you are getting a car that is value for money and well within your budget.
Many used car yards have lower operating costs compared to the flashy buildings and inflated marketing budgets of branded sites. This means independent sites can squeeze their margins tighter, turn their cars over more often and you might end up grabbing a bargain.
7. Avoid the sleazy dealership experience
Stories of bad dealership experiences include waits of over 6 hours to buy a car, dealers swapping out cars after taking deposits, the old “how much do you want to pay per week” trick.
Granted you might become the random stranger in the driveway coming to buy nanna’s Yaris but at least you won’t have to deal with sleazy and high-pressure dealership tactics.
PLUS, because you are buying privately, you can dodge the high profit margins that dealers add to the price of a car and negotiate a great deal, for a fair price on the car you always wanted.
So why buy a used car instead of a new one? It’s not only better value for money but you have a greater choice to suit your individual needs, budget and style.