Second Hand Cars vs New Cars… What to Choose?

Considering buying a car? Whether to opt for a second hand car or new car requires some research and weighing up of all the pros and cons. Then there’s deciding on the actually model and make of car itself. It’s a big purchase so it’s understandably a bit (or a lot!) daunting. Hopefully we can help.

We’ve rounded up some factors to consider below.

Second hand car or new car – buying new

There’s a lot to discuss when deciding if buying new is for you. Knowing how much to spend on a car is just the beginning.

Let’s start with all the perks:

Pros

• Freedom of choice. Being able to choose your paint colour, added features, specs and engine is one of the major advantages you get when buying a new car.
• Full manufacturer’s warranty. Peace of mind is a beautiful thing to have when you’re spending a small fortune on your next vehicle. Knowing that while you’re paying off your car for the next few years it will be fully covered by the manufacturer is a great bonus to have. 
• All the mod cons. If keeping up with technology is something you find important then buying new will have that added benefit. New cars will be straight off the press with all the new optional features. This will include some of the latest innovations in car safety and a highly efficient engine.
• That new car smell. There’s an auspicious feeling when buying a new car knowing that you’re the first owner. With barely any kilometres on the odometer, you’re guarantees that every piece of it’s brand new and free from stains and any wear and tear. 
• Potentially lower running costs. Depending on what car you buy, car insurance can be more affordable for new car owners because these vehicle can be easier to repair. Though obviously the higher your car is in value, the higher your car insurance will be. 

There’s a lot there to make an argument that buying new is always the right approach, but let’s discuss some of the disadvantages of buying a brand new car. 

Cons

• Pricing. New cars cost more than used (older) cars of the same make and model.
• Depreciation. We’ve all heard this term and it’s not a fun one, especially when talking about cars. The second you drive your car off the floor it’s a used car. The first few months of owning a new car rapidly depreciates its value. If you plan on hanging onto it for the long run then this doesn’t hurt as much, but if you need to sell it in a pinch, you will definitely not see much return on investment.
• Added costs. You can overlook the associated on-road costs that come with buying a new car and add to the bottom line. 
• If you want to maximise your warranty, you might find that you’re limited to servicing your new car at the dealership. This means that you are at the mercy of their service pricing. Check out our article on capped service pricing.

Take note. According to the Australian Competition and Consumer Commission, all carmakers must honour their vehicles’ standard factory warranty regardless of whether servicing was carried out at a brand-associated dealership or not, as long as servicing is performed according to the schedule by a qualified mechanic and using quality (preferably genuine) parts]

Now that you have an idea of several perks and pitfalls of buying a new car, there’s still another option before you have the full picture. 

Second hand car or new car – buying second hand

Buying a used car is a popular choice because it mean less outlay for a (hopefully) reliable car. This doesn’t have to be a car that’s 10 years old, remember the second the car drives off the dealership floor it’s second hand.

Let’s dig into some of the top pros and cons of buying a second hand car, to help you decide if it’s right for you. 

Pros

• Affordable. Buying a car second hand is far cheaper than buying its new counterpart. As we mentioned above, cars depreciate rapidly in the first few months. Also, sellers will often also be open to negotiations, unlike dealerships. 
• Low kilometres opportunity. Some used cars can have barely any kilometres on them, having been treated well by someone who didn’t drive a lot. These are the golden opportunity of the new vs used equation – paying a lot less for something a few years old that has very little wear and tear. Especially if it was serviced properly.
• Little difference in features (sometimes). Innovations don’t come at lightspeed. You’ll often find that next year’s model of your favourite car doesn’t add too many new benefits you’ll be losing sleep over not having. 
• Avoid hidden costs. Unlike with new cars, you won’t need to pay hidden costs like dealership delivery fees.

Cons

• Compromise. Unlike at a dealership where you have all the options at your fingertips, in the second hand car world you only have the used car options available in the market at the time.
• Responsibility. When you buy a new car, if it happens to just stop working after 6 months you have someone to hold responsible. With a second hand car this isn’t the case. Unless the manufacturer’s warranty still has some time left on it, you’re left to your own devices.
• Ongoing, potentially higher costs. As cars get older parts need to be replaced and this can increase service costs. 

Second hand car or new car?

There’s no one size fits all to buying a car. Depending on your unique circumstances, only you can decide what’s best for you.

While it’s clearly cheaper to buy a second hand car, if you aren’t sure about where to look or what to look for you may not be doing yourself any favours. Researching how to buy a used car is a good place to start, as is roping in someone you know who ‘knows’ cars. There are many factors, including fuel consumption, that could affect your choice.

Buying a new car is the more expensive option, but sometimes peace of mind is priceless. Make sure you formulate carefully the questions to ask when buying a car and have these answered to your satisfaction. You’ll also need to take a test drive. Plus, it’s a great idea to have a professional look under the bonnet to check all is well.

Only then can you make an informed decision before you choose which car to drive home in!

And if you’re not sure, why not first decide what car suits your needs and then shop both new and second hand cars to see what your options are?

Second hand car or new car – get it insured

We know it can be scary putting all your eggs into one car-basket when it comes risks. Get comprehensive car insurance and get that all important peace of mind.