When it comes to buying a car, you basically have two choices: you buy a brand new car, or you buy a used second hand car. What you want to buy is of course limited to the amount of money you can afford to spend on a car, and what features you want out of a car.
For example, do you want a fuel-efficient car with a diesel engine, or are you a petrolhead that demands a 6.2-litre V8 supercharged monster under the bonnet that can get you from 0 to 60 mph quicker than you can take a sip from your cup of tea?
Why Buying a Brand New Car Sucks
Going back to the cost limitation, one thing that car manufacturers try to do in order to get you to buy a brand new car from them is to offer some enticing finance packages. Peugeot has a “Just Add Fuel” offer which is essentially car finance, insurance and road tax all included within your monthly finance payment for 3 years.
Despite these seemingly attractive offers, there are three reasons why such packages don’t always appear to be as attractive as they seem.
- Firstly, you have to put a deposit down. Some car manufacturers may give you a discount of say £1,000 off the list price of a new car as “deposit allowance”, but they usually recoup the costs through your finance package;
- Secondly, you have to stick to a set payment plan which cannot be changed during the course of your finance without some financial repercussions;
- Thirdly, at the end of your term, you normally have to pay a final balance. With such an amount, you either have to get a loan to pay it off (either a personal loan or refinancing the car through the finance company), or hand the keys over and walk away with nothing more to pay – and no car to drive!
Depreciation is not your Friend if you Buy New
Regardless of how you would buy a brand new car, there is also the issue of depreciation. Some people say that you lose money off the value of a brand new car as soon as you drive it away from the dealer’s forecourt. Sadly, this is true.
Some car models can hold their value really well, whilst the value of others can take a nosedive within the first 12 to 24 months of ownership from new. Have you ever wondered why when you visit a main dealer, some “nearly new” cars that are say a few months old and have 200 miles on the clock, for example, can be as much as £2,000 cheaper than a brand new equivalent? This is our enemy depreciation striking again!
Why Buying a used Car is the Better Option
It might be tempting to buy a brand new car simply because you will be the first owner and enjoy that authentic “new car smell” that you only get with a brand new car, but the reality of the situation is that buying a used car is a much better option for you, and for your wallet.
Even if you bought a car that was say a couple of years old, most of the depreciation damage will have been done, and you would end up with a car that was just as reliable as a brand new model, and will still be covered under the manufacturer’s warranty in most cases!
And if you have an existing car that you want to sell in order to partly fund your new (used) car, websites like www.sellyourcarfast.com.au make it simple to get cash for your current car.