New vs Used Cars in Australia
It’s an age-old question for consumers: What car should I buy? Is it better to buy a new or used car? Both of these options come with their own advantages and disadvantages. By the end of the process, you may end up wondering whether you should buy a car at all! This article should help you figure out what kind of car best suits your needs and your budget.
Is buying a new car worth it?
A new car could be the right choice for one customer and the wrong choice for the next: it all depends on your situation. There are several things to consider before you buy a brand-new vehicle:
Current and future budget: If you’ve saved up money and won’t need financing, a new car can be a good option. However, if you have to take out a major loan with interest and fees, the cost grows so much that a used car might be better.
Type of vehicle: If you’re a car enthusiast who’s set on a particular make and model, you might be forced to buy it new. In contrast, someone with flexibility in this area may benefit from a second-hand car purchase.
Plans for the car: If you see the car as a long-term investment, it makes sense to get a new vehicle that will depreciate slower and last longer. But if the car is just a way to get around, looking at used options can be a way to save money.
Pros and cons for new and used cars
Is it better to buy a new or used car? To get the right answer for your circumstances, it will help to look at a summary of the benefits and drawbacks for each car type.
Should I buy a new or used car?
The question depends on you. A new car is seen as more reliable, since there is no wear and tear from previous owners that could cause you problems. If you do have issues, you will be protected by the manufacturer or with a long dealer warranty. Furthermore, newer cars have more advanced safety features that reduce your chances of a dangerous and costly accident. New cars also tend to have better fuel efficiency.
Meanwhile, the main advantage of a used car is the reduced price. When buying a used car, the tradeoff you make is a lower price for more risk due to the large number of unknowns. You can mitigate this risk by getting a car history report. This report has checks about pre-existing financing on the car, odometer readings, maintenance and service overviews, whether it’s been stolen, and whether it’s been written off.
Both options sound good! So, what car should I buy?
Thebest-case scenario for most shoppers is getting a lightly used car that’s only a few years old. This brings many of the benefits of a new car without paying a premium price. Whichever option you choose, remember to learn about the dealerships in your area and what experiences other customers are having.
What type of car engine is the best?
Different car engines use different sources of energy, each of which has its pros and cons. Breaking down the main engine types helps you see which option matches your driving needs.
Petrol cars come at a cheap price and are the most common vehicle type. Having a common car type is very useful for easy maintenance and repairs.
Electric cars are pricey up front, but help you save quite a bit on petrol and are also eco-friendly. Electric cars are best in urban areas with charging stations.
Hybrid cars are a combination of an electric motor and a conventional engine. These cars need less petrol and are great for areas with busy traffic.
Diesel cars are more expensive due to the engine design, and the fuel is more expensive, although a fuel card can help. They are optimal for towing and long-distance journeys.
Financing for new and used cars
Loan options will look very different for new vs. used vehicles. While deciding whether you should buy a new or used car, this is something to think about. As a rule, new cars have the lowest loan interest rates. This is because the lender considers the purchase to be less risky, since the car will likely last for a long time.
On the other hand, new car financing can be expensive since the total price of the vehicle is much higher than for a used car. Savings from a cheap car loan interest rate may not be enough to offset such a large loan sum.
A used car loan will likely cost less money overall, but you have to keep an eye on those higher interest rates. Also, most lenders will have a maximum for the age of the car they will finance—typically five to seven years. For customers who want to refinance the car loan down the line, older cars are typically harder to refinance.If you cannot get auto financing for your used car purchase, you could also get a personal loan instead.
New vs used cars: what do I need to come away with?
Clearly, both new and used cars can serve as an excellent opportunity to acquire personal transportation without breaking the bank. The choice you make will depend on your own financial circumstances, the condition of the market, and the type of vehicle that you need.
Now that you’ve learned more about the advantages and disadvantages of each option, you are ready to start looking at car financing options to get set up with the best possible deal for you.