Buying a car – Introduction

First Steps to Buying a Car, Preparation

Buying a car is something that we all get excited about. Sometimes, too excited that we rush onto buying cars that aren’t the best fit for us, our budget, and our lifestyle. 

Some cars look good at first but are very unreliable. Some cars require expensive maintenance that our budgets can’t afford. Some cars consume too much fuel that makes driving a very expensive experience.

Most of us want to avoid those things. After all, we’re buying cars for comfort! I think we’d all agree that those things do not sound comfortable at all.

If you’re reading this, keep reading, as we want to help you buy the perfect car for your needs! 

 

New Car vs Used Car

Let’s start by analysing if buying a new car is better than buying a used car.

Which do you think is better?

Buying a New Car

Buying a new car seems like the best choice at first, especially when you can afford it. It is good in many cases, but is it really that much better than buying a used car instead?

Here are the top pros and cons of buying a new car:

Pros

Freedom of choosing

When you’re buying a new car, you have all the freedom to choose the style, colour, variant, and etc. of the car that you want to purchase.

You want to drive a black, diesel M/T sedan? You got it. Whereas, when buying a second-hand car, your options will be limited. 

Lower interest rates

Brand new cars have lower interest rates than used cars because of manufacturer incentives!

Full Manufacturer Warranty

By buying a brand-new vehicle, you gain access to full manufacturer warranty that second-hand dealers or private party purchases cannot offer you.

Manufacturers are currently giving out up to 7 years of warranty, which is a lot of time! It gives you peace of mind that a used car simply can’t. 

Has the Latest Technology

By buying a new car, you get the most updated technology that comes with it.

For example, buying a 10-year-old car might not have Bluetooth functions. Although you can remedy a Bluetooth function with a Bluetooth car accessory, there are some newer technologies that you simply can’t have on an old used car. 

Although if you’re buying a not-so-old used car, then there shouldn’t be too much difference. 

Cons

Higher Costs

The Obvious one. New cars cost way more than second hand cars. So your cost is higher. Also new cars on average lose value faster, so the moment you drive off the car, you will have lost a lot of value already. Also most cars are advertised at stock prices, so once you add the extras and the enhancements your total cost to purchase might be much higher than what you were initially looking at.

Depreciation Costs

Cars depreciate very fast, so unless you’re planning on using your car for a really, really long time, you should think twice before buying a brand new one because if you sell it just a few years after buying it, you will be catching most of the depreciation costs of the car. 

Did you know that your car depreciates to more than 10% the minute you drive it out of the dealership!?

Expensive Insurance 

The newer the car, the more expensive the insurance. 

Limited Servicing Options for Some 

Buying a Used Car

Buying a used car is a bit off to some people due to some reliability issues. But is it really that bad? In a way, is it even better than getting a brand new vehicle?

Here are the top pros and cons of buying a used car:

Pros

Cost Savings

Obviously, the biggest pro of getting a used car is the cost savings that you will get from it. 

Generally, used cars cost way less than a brand-new vehicle because of depreciation. Unless you’re buying a special old car of some sort, this is mostly always the case.

Less Depreciation Cost

Usually, cars depreciate fast, dropping to about 50% of its value in the first 3 years of ownership. By buying a three-year-old car, you are actually letting the previous owner absorb the car’s cost of depreciation. 

If you decide that you want to sell your used car after a year of owning it, the depreciation won’t be as much!

Most are still in great condition

If you’re buying from a reputable dealer or a trusted private seller, then you can guarantee that most of these cars are still in very great condition. Some even comparable to brand new!

More high-end options to choose from

If you want a higher-end car, say, for example, a Mustang or a fancy Lexus, but you currently can’t afford a brand new one, buying second-hand definitely opens up those options for you. Of course, they’re still going to be expensive, but at least, a lot less expensive now. 

Quicker loan pay-off

Since used cars are generally cheaper, the car loans that come with them are also usually shorter. So if you’re not buying cash, you’re going to be bothered by monthly payments for a shorter amount of time!

Cons

Reliability of the car

The reliability of used cars is sometimes questionable because you don’t know where these cars have been through.

To make sure that you’re buying a car that’s bound to be reliable for the next couple of years, make sure that you inspect the car thoroughly before buying. 

Private party purchase comes with extra risks

If you’re buying from a private party, they might not offer you any free maintenance (at least for the first year and the first 5k-10k miles) or warranties for anything that goes wrong. This will lead to more costs that you surely want to avoid. 

So unless you’re buying from someone that you really trust, these are the extra risks that you may encounter. 

Lesser colour, style, etc. options

While you have more cars to choose from when buying used cars, it’s harder to pick your colour or style of preference when there are only 1 or 2 options available in your price range or at the moment. 

If these preferences don’t really matter to you, then it’s no big deal. But for some who really values aesthetics, this is a bummer, as you’re gonna have to pay for a new paint job or pay more to get close to the desired style that you originally had in mind. 

Might have higher interest rates

Used cars often have higher interest rates which won’t be ideal if you’re looking to avail a longer car loan. 

Which type of car is best suited for your needs?

Sedan

Sedans are the top four-door vehicle choice for most people. 

There are plenty of sedans available in the market for a reason! Sedans are good for small families and students who don’t mind having a smaller vehicle space. There are plenty of reasonably priced sedans available in the market so there’s one for every budget. 

Sedans are also closer to the ground which makes most of them seem more sporty if you dig that sports car kind of look but don’t want to spend thousands on an actual sports car.

Of course, the cheaper ones are not going to be as flashy as actual sports cars but car modifications are always on the table.

However, sedans don’t do well on rough roads, so don’t get one if you’re going to be driving on rough roads all the time!

Most Popular Sedans in Australia

Hatchback

Hatchbacks are similar to sedans but hatchbacks give you a slight increase in space that you might need, plus a couple more things. 

Hatchbacks are one of the most affordable types of cars that you can buy along with the sedan, which makes it perfect if you need larger storage space for your stuff but you don’t have a budget for an SUV or an MPV yet. 

You’re also going to get a lot more than a sedan if you expect if you plan on selling your newly bought hatchback in the future, whether you got it brand new or second-hand, because of its rising popularity!

Although hatchbacks still have less power than larger cars so if you’re going to be driving a lot on rough terrains, it’s not recommended for you. 

Most Popular Hatchbacks in Australia

SUV

SUVs are also very popular among many as they are very versatile cars that you can drive comfortably both on highways and on rough terrains, plus, they look very sporty too! 

Well, they are named Sport Utility Vehicles for a reason. 

SUVs are great for bigger families that need a lot of storage space and better seating capacity. Although, there are some SUVs, like crossovers, that don’t really offer you extra seating capacity (still have more storage space though).

However, SUVs are on the more expensive side as they are generally more expensive cars than smaller vehicles, plus, they consume more fuel because of the size and power that comes with them.

So if you’re on a budget, SUVs are not recommended for you. If not, they’re obviously a perfect choice!

Most Popular SUVs in Australia

MPV/Minivan

For those people and families who need big storage spaces and 7-seater capacities like those on SUVs, but don’t necessarily need to drive on rough terrains all the time, MPVs might be the best option for you.

MPVs are cheaper than SUVs and consume less fuel, but still gives you a lot of legroom for comfort, plus seats that you can use to pick all your friends or relatives up. 

If you don’t have the budget to buy an SUV or you want something that won’t cost you a lot of money in fuel, or you just don’t see yourself being able to maximize the costs of owning an SUV, but you want almost all the good perks that come with an SUV, then definitely get an MPV. 

Most Popular MPVs/Minivan in Australia

Pick Up

Pick-Ups or also known as simply, trucks, are not the best choice for most families if you’re buying it as your primary vehicle, but it does still come with a lot of great perks. 

The most valuable feature that comes with pickup trucks is that they have beds instead of just a trunk. So if you’re someone who has to carry a lot of heavy stuff in their vehicle all the time, a pickup is obviously the best option for you.

Pickups have a rugged look for a reason, too as they are very durable! However, they consume a lot of fuel, which is not good if you don’t want to spend a lot on gas. 

We would go to say that pickups are also good for single people who wants a rugged, sporty look but don’t really need a big space for a family. Something that a sedan and a hatchback can’t offer. 

Most Popular Pick Ups in Australia