The Advantages Of Buying A Brand-New Vs. Secondhand Car3 min read
So youâ€™ve managed to secure financing for a new vehicle. However, you find yourselfÂ in the midst of another dilemma, and this time around you ask yourself: Is it better to buy a new or used car?
There has been a long-standing debate whether one is better than the other, especially for those on a tight budget. And while weâ€™ve heard car owners in the Philippines raising countless arguments for both sides, it’s hard to decide once and for allÂ who the clear winner is between the two. Whether you should get a pre-loved car or something straight out of the dealership actually depends on your personal needs, preferences, and, particularly, the factors discussed below.
Which is a wiser â€œinvestmentâ€?
Financial experts often see vehicles as a liability more than an asset, especially that cars are prone to wear and tear the more you use it. But while a car already loses 20 percent of its value the moment it leaves a dealership, there are vehicles that age like fine wine.
According to online car marketplace Carmudi, â€œOld cars that have a certain history (mostly luxury cars) or cars that have been owned by a famous figure could have their prices appreciate, especially if they are still in good running condition.â€ If youâ€™re planning to buy an old car, better make sure it begets more money the longer you possess it.
Winner: Old (vintage) car
Which costs less in the long run?
At first glance, used cars are cheaper than their zero-mileageÂ siblings, and thisÂ stretches all the way from the tagÂ price, cost of parts, and cost of insurance policy. But you should take into consideration that cars older than five years areÂ more prone toÂ wear and tear.
The money you could’ve used toÂ mortgage your brand-new car might be spent on parts and repairs on a secondhand car. David Gluckman of Car and Driver offers a soundÂ argument:Â â€œFor other people, it’s not even the money that is the issue, but the downtime involved,â€ he says. â€œEven if you had time and money to spare on a secondhand car’s foibles, other people in your family might not be as fortunate. This is because they need the car for their own use to make their lives easier, safer, and more convenient.â€
Winner: Brand-new car
Newer technologies make it possible for safety features like anti-lock braking system (ABS) and side impact airbags to be existent today, not to mention backup cameras and smart interior features. Since countries become more and more stringent in terms of car safety, manufacturers have to keep up with the times.
Gluckman furthered by saying that â€œother technologies that are not mandated, like blind-spot monitoring systems, side curtain airbags, adaptive cruise control, and brake assist are becoming more prevalent on less expensive vehicles as their associated costs come down.â€ Unfortunately, first-generation Mustangs donâ€™t come with the safety features that the new Ford Fiesta offers.
Winner: Brand-new car
Used cars, especially vintage ones, are sought out by collectors and casual drivers alike for a simple reason: theyâ€™re hard to find. Parts of these rare breeds may be hard to come by, but a little networking can go the distance. Owners of niche car modelsÂ band together online or through car clubs not only toÂ show love for their cars, but also toÂ make repairÂ andÂ diagnostics easierÂ by looking afterÂ each other’s backs.
â€œWhen you want to buy an unusual car, as I want to, you start with the forums,â€ Jalopnikâ€™s Doug DeMuro writes. â€œThis is because forums for unusual cars are a gold mine: they know every issue, every problem, and every fix.â€
Winner: Used car
Buying a used car can be a lengthy and costly process: you look for a trustworthy seller, transact through a lengthy exchange of messages and calls, inspect and test-drive the car, process your loan application. On the other hand, new car dealers will take care of all the legwork for you; all you need to do is sign some papers.
â€œAnother thing I liked about getting a new car is that my dealer handled the legwork for this on my behalf (at no extra cost),â€ says Carlos Roig of financial blog Personal Finance Apprentice. â€œThis can also be part of the â€˜freebiesâ€™â€”they’ll shoulder the cost as a sales gimmick (if they don’t offer, you can try asking).â€
Winner: Brand-new car