Before you think about buying a car, read this
New vs used, the age old decision many of us have faced when trying to buy a car. Used cars are cheaper, but new cars are shinier, this internal conflict of weighing up the pros and cons has puzzled many individuals before us. Well here today, we have put our thinking caps on and gone and uncovered some of the hidden perils that we sometimes fail to see when trying to make the decision. We will go over some of these today so that when we do finally find the car of our dreams, we will stop and think twice, by getting out our tiny notebooks and going over the aspects that we really should cover.
Looking at a new car
Now first things first, new cars are shiny and smooth to the touch and the car dealers, are even smoother. New Vehicles, having higher safety ratings, the latest technology, the higher fuel efficiency, actual warranties, lower maintenance and well, of course, that beloved new car smell. Could be the better bet for you, if you are willing to pay. You need to think of a new car as a potential partner; you have to see yourself together for the long run. If you are making the big investment and are purchasing a brand new car from a car dealer, you need to make sure you can see yourself together in a mutual, loving relationship. If not, then don’t bother. Because if a few years down the track, you decide you want something different, and it’s time to sell. You will be met by the giant cold wall of depreciation.
It’s just like the animals in the rainforest, the most beautiful and colourful ones, are often the most poisonous. Depreciation occurs as soon as you drive off the lot. Estimated around 30% after the first year, follow that with another 10% in both the next two following years and then you might look to expect only $14,999 back from the original $29,999 you paid. Depreciation hurts hard and fast and can often leave you questioning the initial investment you made.
Looking at a used car
Now used cars, however, are different. They may not be pretty, they may not smell good, but it’s our first, and we think they are amazing. These cars are, of course, a whole lot cheaper as they have already been hit by depreciation. You may pick yourself up an XF Falcon, have some fun with it and then flick it off again a few years later at practically the same price. The joys of used cars are that you don’t have to worry as much, as financially, they are safer. Or well up front, it may seem like this.
The hidden perils of used cars can hit hard, and they can hit when you least expect it. Whether it be exhaust leaks, loose seals, hidden rust, worn tires, worn shocks, frayed seat belts, damaged hoses, oil leaks, radiator leaks, strange smokes, strange tapping, knocking, grinding or whining. The list goes on and on and sometimes it can be too much for us to try search for. Used cars can if you are not careful, end up costing you just as much as a new one as you don’t honestly know what it’s been through. This unreliability can be dangerous for some as an unexpected breakdown and mechanic cost at a certain time could spell trouble for the individual. This is why we need to think carefully and utilise the tools we have at our disposal before going ahead and making a purchase.
Tools to Get the Upper Hand
For new cars, you need to bite the bullet and realise that your new asset will depreciate, so getting a reasonable price or planning out your expense is a good idea. To get a good price from the dealer, you need to be confident and be prepared to negotiate. But to do this, you need the money to back it up. If you have the cash already sorted, then that’s perfect, if not, then don’t worry as a pre-approved car loan could be right for you. Being able to walk up to the car dealers with cash in hand will be too hard for them to refuse. Also doing this at the end of the month when they are under pressure to meet their sales quota, will help give you more bargaining power too. You should go about contacting your credit union to find out more or to apply for a personal car loan. Even using a loan repayment calculator could be beneficial as you can plan ahead and find out if purchasing a new car would be viable for you.
For used cars, you should consider the same advice. Walk up with cash and assess whether it is something you can afford, but you need also to check the vehicle. If you are not a mechanic, then spotting out all the potential issues with the car could be near impossible. This is why you should consider bringing a friend who knows their stuff or asking to take the car into a garage for a pre-purchase inspection. $150 now, could save you a couple thousand later down the track. But if you insist on going solo, then you should have a checklist memorised or with you so that you can protect yourself financially and physically. For an excellent online checklist, look at NZ Transport Agency.
So now you have an idea of the perils of purchasing a new car from a car dealer or a used car from some guy online. Be careful with both and go in prepared. Cash is king and knowledge is power. Don’t be fooled this summer and end up with an investment that costs you more than you would like. Be prepared and don’t be afraid to ask for help, paying up front now, could save you a lot, going down the road ahead.