When deciding to purchase a car, you will need to decide whether you are looking at a new or used vehicle. Doing your research can help you work out which car meets your needs in the long run.
When it comes to buying a car, it’s easy to get excited at the thought of owning the latest model with new features and stunning leather seats. However, if you considering an older model then a used car might work for you. Hereare some tips to help you decide.
Buying a new car
It has to be said, there’s nothing quite like the feeling of owning a brand new car –not to mention the new car smell.
With a new vehicle, you can choose a model with the latest features, obtain a new car manufacturer warranty that typically lasts between three and five years and, depending on the dealer, you could benefit from capped-price servicing.
You also get to choose which optional features you want on your vehicle, such as the trim, colour, wheel upgrades and more. In short, you can get the features you want, and the new car warranty can also provide you peace of mind.
New cars also tend to break down less than used cars, and if serviced according to the manufacturer's requirements, they could remain mechanically sound for the first few years with very few problems.
The downside is that most brand new cars can quickly lose a significant percentage of their value due to depreciation within the first few years of ownership. Depreciation rates can vary depending on the make and model of the vehicle.
Buying a used car
As long as a vehicle has been well looked after and regularly serviced, you might also consider buying a second-hand car.
If the car is only a couple of years old, it might still have a valid new car manufacturer warranty and also access to capped-priced servicing.
A downside of buying a used car is that you’ll have to take the car as is. There are usually many used cars available for sale in the market, so take the time to look and you’re likely to find one that meets most of your needs.
You can choose to purchase a used car from a licenced car dealer, through private sale or via an auction.
Buying from a private seller may carry certain risks. Here are some things you can consider:
- Review the logbook and certificate (if applicable)
- Review the current certificate of registration
- Arrange for a mechanic to inspect the car and prepare a report
- Confirm that the person selling the car is the owner
- Test drive the car at fast and slow speeds
- Check to see if money is owed on the car or if it has been written off or stolen by doing a PPSR check.
If you’re considering buying a used car at auction, it is important to note that the car is not usually covered by a dealer guarantee and normally you can’t take it for a test drive. So it may be a good idea to arrange for an independent vehicle inspection prior to the day of auction.
Many factors can influence your buying decision, and while each make and model can appeal differently, knowing what you need the most is key in helping you decide whether to buy brand new or go second-hand.
This article provides you with factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Neither Pepper nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in this article. For information about whether a Pepper loan may be suitable for you, call Pepper on 13 73 77 or speak to an accredited Pepper Money broker.
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