fbpx
  1. Finance Tips
  2.  → Buying a Brand New or Second Hand Car: Which is the One to Buy?

Buying a Brand New or Second Hand Car: Which is the One to Buy?

Jun 1, 2022 | Finance Tips

The choices on the car market seem endless these days, with so many makes and models available. But more choice makes for a tricky decision; choosing between a brand new car or a used car!
That new car smell sure can be alluring, but so too can the cheaper price tag of the used version. If you want to weigh up the best option between a new or used car for you, keep reading as we sort through pros and cons of both to help drive your final decision.

Where to start when choosing between a new or used car

Price

Starting your research on new and used cars should really begin with your budget. Regardless of whether the vehicle you’re looking at is tucked away on a glossy showroom floor, or has been pre-loved and on your local classifieds, it needs to fit with what you can reasonably afford.

It’s no secret that a pre-owned vehicle is typically the more affordable option, and is often considerably cheaper than when you buy new. This is largely due to the depreciation that cars experience after the initial purchase.

If you’re looking at getting finance for your next car purchase, it can be hard to start searching for vehicles before you know how much your loan will cost you each week.

Check out our car loan calculator so that you can get a better understanding of how much your repayments could be if you are approved for a loan with us.

 

Car Loan Calculator

Time spent on new cars vs used cars

If you’ve got the money sorted, but it’s time that you’re poor with, new cars do come with the advantage of generally being more available with the specific options that you want. Perhaps you want a particular make and model with leather seats, not trim — or in white, not red; the used car market is as it is, whereas new cars have the advantage of generally being able to be selected to your exact specifications. (Plus, all the latest features on top of that new car smell can be hard to resist).
On the flip side, you could find a used vehicle with everything that you want close to you, which could help you save money compared to the new purchase price. This could also save you money in the long run as you won’t have to suffer the initial depreciation hit.

Total costs

Looking at how much you want to spend on a car doesn’t stop at the purchase price. When you’re trying to decide on buying a new car versus old, you’ll need to look at the total cost of the vehicle. This includes things like car insurance, services, registration, fuel costs and other charges and factors.
As an example, a V8 will generally cost more in terms of registration and petrol over a more economical four-cylinder car. A 4WD will typically mean you pay more for tyres than you would for a sedan. Particularly with the recent surge in fuel prices, looking for a fuel-efficient car can certainly have its cost advantages.

The other consideration you should make is the cost of your interest repayments if you're taking out personal finance to buy your car.

At Finance One, we want to answer all of your questions when it comes to buying a car. Don’t hesitate to get in touch with us so that you know how much you could be paying if you are approved for a loan with us.  Talk to us Now

New Car Warranty

One of the benefits that most new car prices cover is a manufacturer’s warranty, which can save you from paying for major repairs out of your own pocket for the first few years. Most new cars come with a minimum five-year manufacturer’s warranty, which is certainly attractive when you buy a new car.
This isn’t to say that to buy a new car straight from a dealer is the best option; sometimes, you can buy a vehicle from its previous owner, with some of the warranty still valid!

Our top tips to buying a second-hand car or new car

When buying any car, regardless of whether it’s a used car or new, car sales can be complicated transactions. Here are our top tips to help:
Look at all of your options
Car dealers aren’t the only place that offer used car sales. You’ll likely be able to find certified pre-owned cars at places like an auction in your local area. Buying from a reputable dealer is a great way to make sure that you’re not being taken advantage of. However, there is a lot of value to be had in private sales as well, such as classifieds.
Keep a paper trail
Whether it’s to access your full warranty on a new car or because you chose to pay cash on a used option, make sure that you keep an adequate paper trail of your purchase. This will also help if you go to on-sell your car down the track.
Use the proceeds of your existing car
Unless you really need two cars and two sets of registration, you could consider selling your current car and using the proceeds to reduce the outlay towards your next car. If you’re buying through a dealership, then you might look to offer your old one as a trade-in. It’s common knowledge though, that often you can access a higher price for your vehicle by selling privately. You could also look to use the sale of your old wheels as a deposit towards your car loan! But make sure you get independent professional advice first!
Get car insurance before you drive away
Obtaining a comprehensive insurance policy on your new pride and joy isn’t just sensible to protect your latest purchase, but is sometimes a requirement on some car loans.
Opt for a secured loan
Avoid paying more interest than you need to on your car loan by opting for a secured car loan. We can help you understand the difference between car loan options.
Secured car loans may be the right option for people with bad credit, or who are receiving Centrelink benefits or self-employed. Used cars can even be used as loan security and can be the difference between accessing finance and being turned away.

At Finance One...

We’re in the business of helping Aussies out when they’re looking at applying for a loan to buy a new ride. Don’t let bad credit be a barrier to jumping behind the wheel of an upgrade, get in touch with us to discuss your situation or apply now!Apply for Vehicle Finance

Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent advice regarding your legal, financial, taxation or other needs, to check how the information relates to your particular circumstances.  We do not accept responsibility for any loss arising from the use of, or reliance on, the information. All loan applications are subject to normal lending criteria. Fees and charges payable. Terms and conditions apply.

Share this article

WRITTEN BY

WRITTEN BY

Makala Elliott

Makala is the Marketing Manager at Finance One. She has worked in the Finance and Lending industry for over 10 years, gathering a wealth of experience. She is passionate about helping Australians get back on track with their finances by passing on her knowledge.

Related articles

Finance Tips

How to Negotiate Your First Car Loan Like a Boss

The car buying process can be intimidating for any car buyer, but particularly if it's your first time also getting a car loan!If you're exhausted by the amount of things you need to know before you can start looking for your car, then you could...

Finance Tips

Finance vs Paying Upfront

The great thing about car finance is that you don’t have to save as much of your money to purchase a vehicle. However, there are advantages and disadvantages that should be considered for using finance as well as paying for a car upfront....

Finance Tips

Do I Need Comprehensive Car Insurance?

If you’re scratching your head wondering what is comprehensive car insurance, and more importantly, if you need it, this quick guide should help clear things up.You’re thinking about getting a loan to buy a car, but you’ve been told you need...