Should you buy a new or used car?

Should You Buy a New or Used Car?

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Recalling the night when I couldn’t fall asleep as though I had slugged down five cups of coffee at once. Counting sheep didn’t help at all as I was god da*n excited about the next day. 

And the day had finally arrived. The moment when the salesman handed over the car keys to me, I had this feeling that was indescribable. It felt like a transition to adulthood when I finally own a car after forking out my hard-earned money. Amazeballs!

Did you feel the same when you bought your very first car in life?

There’s a common question that many people may ask themselves before making probably one of their biggest purchases in life. “Should I buy a new or used car?” 

It was a real toughie for me as well. But after weighing the costs and benefits, I decided to buy a used one. And here’s why.

1. Depreciation

From an economic standpoint, buying a used car is clearly a better choice. A car is a depreciable asset which loses value over time. A new car can lose as much as 20% of the value the moment you drive it off happily. 

The worst part is that a new car generally takes the biggest depreciation hit in the first few years. It’s not uncommon to see a new car worth only less than half of its original price after three to four years.

Thousands of dollars are wiped off over such a short span of time. You don’t normally feel the pain until you have finally decided to sell or trade in your car. 

Therefore, it doesn’t really make any financial sense for an average person to buy a new car. 

2. It’s cheaper

The reason above leads to the next more than obvious reason to buy a used car. Due to the huge depreciation that a new car normally suffers, buying a used car becomes a much cheaper option. You can simply afford a car with a similar make and model merely at a fraction of its original price.

As a result, you also have more options given a fixed amount of budget. Sorry to say but for some people especially the guys, a car is more than just bringing them from one to another destination.

So, perhaps it’s not a bad idea to buy your dream car at a much lower price a few years earlier than you’ve originally planned. 

3. The old stigma of buying a used car

There was an old belief that you could easily get a lemon from buying a used car. Reliability is always the main concern that causes many to lose confidence in used cars. 

The old stigma of buying a used car doesn’t hold true anymore as the automotive industry is continuously evolving with the exponential growth of technology over time. Professional car reviews, as well as customers’ reviews, are easily accessible with just a click of a few buttons online.

4. Simple precautionary steps give you peace of mind

Maintenance records of a used car

In most cases, there’s still a valid warranty period if you’re getting a used car which is only a few years old. You only need to check the historical maintenance records to make sure that the previous owner had always sent the car for regular maintenance. Because the warranty period will automatically lapse if the manufacturer’s scheduled maintenance is not strictly followed.

Car inspection

If you’re worried about buying someone else’s problem, get your own trusted mechanic to do a thorough inspection. It’s easy-peasy for him to find out whether the car has undergone a major overhaul or met accidents before. Paying an extra of a few hundred bucks can give you peace of mind without going the extra mile.

5. The best of both worlds – certified pre-owned or reconditioned cars

Certified pre-owned or reconditioned cars can be a good middle ground between the new and used cars. They are cheaper than brand-new cars but slightly more expensive than the typical old used cars.

Certified pre-owned cars

A certified pre-owned car is a type of used car certified by a factory-backed manufacturer. 

It’s normally fairly new with low mileage and always comes with an extended warranty. It typically goes through a thorough inspection and reconditioning before it’s released to the public. You have a cheaper alternative to a brand-new car while getting the assurance that the car is still in great shape.

Check these out:

a) Mercedes-Benz certified pre-owned cars

b) Lexus certified pre-owned cars

c) Toyota certified pre-owned cars

d) Hyundai certified pre-owned cars

Reconditioned cars

On the other hand, you can also choose to buy a reconditioned car. Reconditioned cars are very popular among the Malaysians. In fact, Malaysia is one of the biggest importers of reconditioned Japanese cars.

Reconditioned cars are used cars imported from other countries. They have yet to register with the Road Transport Department of Malaysia, also known as JPJ. To put it simply, you’ll get a new number plate when you buy a reconditioned car.

Reconditioned cars are brought into the country using the Approved Permits granted by the Government. These cars are typically refurbished after undergoing thorough inspections. Reconditioned cars have low mileage and are generally less than five years old. 

The best financial decision on my biggest financial mistake in life

My first car in life
The first car that I bought in life

I bought my very first car before I reached 25 years old. And I regard it as the best financial decision on my biggest financial mistake in life. It sounds like I’m talking gibberish isn’t it?

For those strong proponents of frugal living who are always working towards financial independence, it’s probably a dumb move to spend big bucks on a lifeless tool that only brings them from one to another destination.

But the brutal truth is that MONEY can buy HAPPINESS.

The reason is incredibly simple for me. I came to realize that there’s nothing happier than achieving my own self-fulfillment. I can puff out my chest and shout it out loud, “This is my car!” And not only I will ever reach 25 years old once in a lifetime, but it also marks my lifetime legacy. 

One day, I’ll tell my grandkids that’s the first car that their grandpa bought in life.

Of course, I did not make my decision hastily without proper deliberation. My car is a few years old reconditioned car that came with a warranty on the major parts of the car. I did thorough research on the car reviews and features before test-driving. 

Besides, I also mapped out the monthly loan installments, yearly road taxes, insurance rates and regular maintenance costs to make sure that everything fits into my budget.

Finally, I signed on the dotted line confidently knowing that the purchase won’t hit me financially. Though it may take me a little longer to reach financial independence, LIFE IS SHORT.

If I were to travel back in time, I would make the same decision in a snap of fingers with no regrets.

Final Thoughts

In short, buying a used car can save you a huge chunk of money. Of course, it may not worth mentioning for those with deep pockets.

No doubt many people would still prefer buying a brand-new car despite the significant savings from buying a used one. Certainly, it’s not wrong for you to think that a factory-fresh car is still the best. 

And paying thousands of dollars more for the new car smell is definitely worth it if “My first car in life must be brand-new!” means a lot to you.

At the end of the day, it’s a personal choice. What say you?

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