Is it worth buying a new car or used? This is an age old question when it comes to buying cars. Everyone’s situation and personal preferences are different, so while it makes sense for some to go the new car route, for others it is probably better for them to follow a used car buying guide instead.
There are advantages and disadvantages of buying a used car or new and we’ll go through some of these in order to help you work out which may be best for you.
Pros of buying a new car
Warranty – all new cars sold come with a manufacturer’s warranty. This offers peace of mind that if your car has a fault, the manufacturer will fix it at no cost to you. New car warranty periods and conditions vary between different manufacturers but should be at least three years. For example, Peugeot provides a 5 year/unlimited km warranty on its vehicles, and throws in free roadside assistance for that whole period too.
Reliability – A new car is, well, brand new, so there’s no wear and tear or issues with reliability to worry about. Besides, you have the manufacturer’s warranty if anything does go wrong.
Technology and Safety – Car makers are constantly trying to improve their offerings to customers and also have to keep up with any changes in safety and regulatory requirements. So the newer the car, the more current and advanced its technology and safety features are likely to be.
Customisable – When buying a new car, you get the opportunity to select the features and options such as the colour, infotainment and safety options you want to include, and have the car built pretty much exactly as you like.
New car smell – For some of us, nothing can beat that new car look, feel and smell!
Cons of buying a new car
Price – The price is going to be higher for a new car, with all the new features, warranty etc, not to mention additional costs in taxes and registration. So buying a new car requires a lot more cash than buying a used one.
Depreciation – If you’re thinking of your new car as an asset, think again. There is no argument that the value of a new car drops as soon as you sign on that dotted line. The depreciation can be around 10-15% immediately off the car yard and 40% in the first three years.
Higher Insurance – A new car means a higher value, and that typically translates to much larger insurance premiums.
Pros of buying a used car
Cheaper – With the rapid depreciation in value of new cars, you can save thousands buying the exact model used car, but that has is and just a year or two older. This can make buying a used car an excellent option if you’re low on cash and working with a smaller budget.
Depreciation – There’s no need to worry about the value of your car depreciating at a rapid rate after purchase. Most of the depreciation has occurred after 4 or 5 years, so no sleepless nights over this issue.
Insurance – Due to being lower in value compared to new cars, the cost of premiums will likely be lower for a used car.
Choice of seller – When buying a used car, you get the option to buy from a private seller as well as a dealer. This opens up more sources to buy from of and possibly greater savings (although buying from private sellers and others doesn’t come without risks).
Cons of buying a used car
Condition – There’s no guarantee that you won’t run into problems with a used car, depending on its age and condition. With more wear and tear you can probably expect more frequent maintenance, though you can avoid real problem cars by doing a proper inspection before purchase.
Features and Options – Unlike when buying a new car, you can’t choose what you want to include in a used car, only go with what is already there, meaning you may have to compromise on certain features and options it comes with.
Finance – Getting a loan for a used car is usually more difficult due to the risks involved. If you don’t have luck securing a pre-approved loan yourself, it’s often less hassle to buy from a dealer that often can offer you finance for used cars.
Dealer Demonstrators – Best of Both worlds?
Another option when buying a car is the possibility of buying a dealer demonstrator model (or sometimes referred to as a ‘demo’). Demonstrator’s are basically cars in the dealer’s stock that have been registered but not sold, and are kept at the dealership as vehicles for test drives, for management staff as company cars or as service loan cars.
The simplest way to describe a demo is “near-new”. And being “slightly used”, demos will be a little cheaper than a brand new car but will have at least all the standard features of a current or very recent model. It will still come under a new car warranty (though with slightly shorter period remaining, depending on when the demo was first registered) and just like with a used car, you will have to be happy with the options that have been chosen and already built into the demo.
Making a Decision
As you think about what kind of car you want to buy, refer to the pros and cons listed above and break down your options. Try to prioritise what matters the most to you in the car buying process.
Perth City Peugeot is a one-stop car dealer that stocks new, used and demo vehicles. Give them a call if you have any questions and drop in to the dealer and see the differences of each type for yourself.