Car shopping can be time consuming exercise, but if you have an idea of what you want and how much you can afford to spend, it can be a fun and rewarding experience. When you start shopping around for a car, it pays to be smart.
Set a budget beforehand and don't be tempted to go over your head in debt just because finance is available. As for the features, be practical. Do you need a family car to drop the kids off at school or a utility vehicle to carry your tools around for work?
The biggest question people often ask when it comes to buying a car is whether to buy a new or used one. Both have their own advantages, which we'll go through here.
For many people, nothing beats the feeling of a new car. Completely untouched, it's never been driven by anyone else, ticks every feature on your wish list, and has that coveted new car smell. On the converse side of course, it could potentially break your budget and keep you up at nights worrying about dings and scratches. Here are some things to consider when looking at a new car:
Pros of a new car:
- mechanical reliability is guaranteed (usually for the first three years)
- competitive warranties can save heaps something goes wrong
- choice of interior features and exterior colours
- offers all the latest gadgets and gizmos
- equipped with the latest safety features, like side curtain airbags and brake assist
- higher fuel efficiency and lower emissions
Cons of a new car:
- obviously a pricier option upfront, and there are additional taxes and charges that you generally can avoid on a second-hand car
- more exposed to depreciation, as new cars can lose up to 40% of their value within the first three years1
- in order to keep your warranty valid you are generally required to commit to a servicing routine and you are limited on where, and by whom, you can have any servicing undertaken
Ultimately when it comes to a new car, there's a pride of ownership and peace of mind that can't be beaten, but you need to balance cost with value.
Buying a used car can be a bit of a gamble, but with some research and clever bargaining, you could get yourself a great deal.
Pros of a used car:
- as the cheaper option, you could step up to a better model
- the steepest decline in the car's depreciation will have already occurred
- thanks to the internet, you have a huge range to choose from and it's easy to connect with private sellers and avoid the middleman
- insurance tends to be less expensive for used cars
Cons of a used car:
- you'll never really know how it's been driven in the past or how well it's been maintained
- it may lack some technological gadgets or the latest safety features
- maintenance can be costly
- finding replacement parts can be difficult and expensive if the car is very old
- older cars tend to be heavier on fuel and emissions
Basically, a used car is a riskier option but you could get far more bang for your buck. If you're leaning towards a used car, it's worth doing some research, getting an independent mechanic or garage to check it out and obtaining a car history report before you commit.
Ultimately, whether you opt for a new or used car is a personal choice that comes down to your budget and the features that are important to you. You could even sit on the fence between the two options and go for a demonstrator model or superseded or old stock from a dealership - they're cheaper than brand new cars but have no hidden history you need to be wary of.
- Buying a new car vs buying a used car, The Royal Automobile Club of Queensland (RACQ)
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