Is it Worth Purchasing a New Car, or am I Better Off With a Used Car?

There are pros and cons of both options whether deciding to buy a new car or a used car. The things to consider when purchasing a new car is that you know you will be the first owner and that you can be certain that the car has not been driven negligently. You will also get the full manufacturer’s warranty with the car and you will get it drive away in your name without having to worry about renewal of registration or Compulsory Third Party Insurance for another 12 months.

However, you are also paying additional costs, such as Dealer Delivery charges and the vehicle will also lose a lot of value the minute you drive that car out of the dealership. All the government charges, dealer delivery and on road costs inflate that decline in value the minute you drive away, so you can pretty much kiss at least 20% of the purchase price away from depreciation the very first day you own the vehicle. You must admit though, it is nice owning a brand new car with that new car smell.

The benefit of purchasing a used car is that the negotiable price is not necessarily determined by the manufacturer or the dealership. You have more options in regards to purchase if you don’t like the experience of purchasing through a dealership, such as auctions or private sellers and the purchase price would be determined on what the seller is willing to sell it for. If you buy well, you should be able to purchase a car that will not decline in value as much as a brand new car would so quickly after the purchase.

When purchasing a used car, you need to consider the additional costs of state based stamp duty on the transfer of registration into your name and how much length of registration you would have prior to renewal. You may consider whether you would require purchasing a used car warranty, which is another cost that may have to be added to weigh up the total cost.

Quote from David McGibbons at CarLoans.com.au

You also need to be very cautious in regards to buying someone else’s problems and proper due diligence needs to be in place prior to committing to handing over your money for a used car and this could mean additional costs, such as comprehensive vehicle inspections and checks on the vehicle to show if there is still any finance owing on it, or if the car has been reported as stolen, or a “write-off”.

You never really know what “cover-ups” have been done on a used car, so the purchase is a bit of a risk in regards to this where you don’t have this problem with a brand new car. You could be better off in regards to the value of your car with a used car, but a lot more investigation and caution is required and if you are very diligent, you can do very well out of a used car transaction.

I think that both options have their benefits and downfalls and would come down to the individual. If you want a care free purchase, perhaps a brand new car is the way to go, but if you are the type of person who likes to snap up a good deal with a lot more additional research involved, perhaps a used car could save you money.