Should I Buy A New Car? The Benefits of Buying New Vs. Used

• You Know What You’re Getting Into: With a new car, you have peace of mind knowing it hasn’t been in an accident or has pre-existing, mechanical issues. Coupled with pristine cosmetic appearance, the latest safety features and minimal kilometres on the odometer – it’s the ultimate fresh start.
• Easier To Buy: When buying a new car, you are mainly considering which car best fits your lifestyle, the features you’re after and at what price. Used cars need more due diligence as you are inheriting a car that may have existing yet hidden issues that require a more thorough investigation to unveil.
• Backed By Warranty: Possibly one of the greatest things to look forward to is the lower running costs for ongoing maintenance and servicing for the first few years. With manufacturer warranties often covering a set amount of years or kilometres, warranties add to the resale value if you were to sell your car before the warranty expired. Drawbacks

• Higher Cost: Buying a new car is a luxury that allows you to custom pick your colour, make, model and features. Generally, the more complex the technology, the more inflated the price tag. These choices, coupled with being the first owner of the latest and safest vehicle of that model, are what you’re paying for.
• Depreciation: As new cars are bought at a higher price, they have a far greater value to lose over time. A new vehicle will lose 20% of its market value the moment you leave the dealership. After three years, it will have lost 30% of its original value. A car that was bought $50 000 brand new, will have a market value of $35 000 just three years on. That’s $15 000 in resale value, lost to depreciation. While classic and rare vehicles are the exception to this, depreciation is a very real factor to consider if you were looking to resell and upgrade your car in the future.
• No Cooling-Off Period: When purchasing a new or demo vehicle, there is no cooling-off period once the contract is signed. It is possible, however, to have conditions in your contract. The most common condition used is “Subject to suitable finance”, which is used where there is uncertainty around finance. What this means for you, is that if there is a disagreement regarding finance with the dealer or broker, you will have the right to terminate the contract, despite there being no cooling-off period.

Benefits

• Cheaper To Purchase: As new cars rapidly depreciate, you can still purchase a relatively new, stable car for a fraction of the price. The savings of a second-hand are their primary advantage, as you lose far less of the market value to depreciation. These savings can always be reinvested back into customising your car with cosmetic add-ons like speakers, tinted windows and upgraded interiors.
• Cheaper To Insure: Having a lower-market car can bring down the cost of your insurance and registration. While these premiums are reliant on many different factors, including age and driving history, having a car that is not brand new often attracts lower premiums and comprehensive covers.
• Less Pressure When Life Happens: At the end of the day, some things are out of our control. That dent you pick up one day at a carpark, that time you accidentally opened the door without looking – with a used car, there is less mental emphasis on keeping your car in mint condition. While regular maintenance and upkeep are important, you won’t have the pressure of keeping your car in perfect condition.
• Hand Back Options: With both private and dealership purchases of used cars, you are entitled to a cooling-off period. By law, you are entitled to a cooling-off period until the close of business the next day. In addition to this mandatory cooling-off period, some major dealerships offer a hand back option of up 7 days after you’ve taken the vehicle. While there are terms and conditions to these promotions, such as maximum kilometres you can drive after purchase, these do offer a safety net to give you peace of mind when buying a used car.

Drawbacks

• You Inherit The Past: A used car may come with limited to no warranty. This means you’re no longer safeguarded from the cost of repairs, which will subsequently come out of your own pocket. You will inherit the current condition, logbook and servicing history and the existing registration. It’s advisable that before purchasing a used car, check for spare keys, registration expiry, logbook history and tire tread thickness. Be aware that any included warranties usually come with limitations on what parts and amounts are covered. It would be advisable to also have the vehicle professionally inspected to gauge how mechanically sound the vehicle is.
• More Time In Finding The Perfect Car: While there may be a surplus of used cars on the market across Australia, finding your preferred car may require additional steps. From in-depth research and physical checking the car yourself, to sourcing a professional opinion and ensuring there is no outstanding finance on the car, this due diligence will ensure you are purchasing a pre-loved car with confidence.
• Limited Selection: With new cars, you have more flexibility to mix and match your features to create your custom car. Used cars are often less forgiving, and may require you to sacrifice your dream car for a more pragmatic find. Go into a car search with a clear list of what you absolutely want, and what you are willing to forego if you found a car that ticked enough boxes. Things to consider include kilometres, features, history, make and model.
• More Time In Finding The Perfect Car: While there may be a surplus of used cars on the market across Australia, finding your preferred car may require additional steps. From in-depth research and physical checking the car yourself, to sourcing a professional opinion and ensuring there is no outstanding finance on the car, this due diligence will ensure you are purchasing a pre-loved car with confidence.

Purchasing your next car comes down to your preference, lifestyle goals and financial situation. While there is no right or wrong choice, talking to a finance expert can ease financial uncertainty when making this sizeable purchase.

From saving you money, time and ensuring you get not only the best deal for your circumstance, but that you review the finer details of said deal, a finance broker can be a lifesaver for your future financial situation. They consider your savings, the security of your employment, any existing debt and your potential monthly repayments to ensure you’re setting yourself up with a purchase you can work with.

The difference between an average and an experienced broker can be the difference in you getting an approval – or not. An experienced broker matches your profile to suited lenders, whilst preserving your credit file.