Consider the Pros and Cons of the purchase you wish to make
Whatever car you decide to invest in always consider the Pros and Cons of the purchase you wish to make
Let’s take a look at the Pros and Cons of investing in new and secondhand cars
With all the opinions floating around it can be hard deciding what car you want to invest in. But Autoworks understands that everyone’s life is different – and some prefer secondhand, some new, and some just haven’t decided.
Autoworks is ready to assist no matter what car you decide to invest in. Below are the pros and cons when deciding on what your new purchase will be.
Let’s take a look at the pros and cons of buying a used car:
Pros – Used Cars
- Lower cost – used cars cost a decent amount less than new cars. With this lower cost, you can pay the car off immediately on day of purchase. Alternatively you can pay the car off much sooner and at a lower installment rate
- Higher selling rate – when you are ready to re-sell your used car, you will get back most or all of the money you originally paid (depending on the mileage and or mechanical problems the vehicle has at time of sale)
- Insurance premium – insurance companies ask for a monthly payment based on the value of the vehicle. Should the value of the used car be lower than the original cost, your rate/premium should also be lower.
- Vehicle quality – as technology has improved, so have cars. Newer car models are more likely to last longer depending on the conditions they are driven. For this reason, used cars may be just as reliable as new cars.
Cons – Used Cars
- Reliability – there is almost no way of knowing a car’s full history. You could be the second, or even the third owner/driver of the vehicle. If this is the case, then information could have easily gotten lost while the vehicle was changing hands.
- Higher maintenance – after the car has been driven for a month or two, you may come across some issues that need to be fixed. These issues could become major. And you may have to spend a decent amount of money on the repairs needed to ensure your car is safe to drive
- Manufacturer’s warranty – warranty periods are set as the same number of years a car is built to last. If someone decides to sell their car once the warranty period has ended, it will end up costing you more per month to get a third-party warranty.
There are ways to avoid certain things, but nothing is a guarantee when it comes to buying a used car. The first suggestion would be to have the seller complete the roadworthy and any roadworthy repairs before final purchase be made. And the second would be to do your research on the warranty companies by reading through, in detail, what they do and do not cover (always read the fine print).
Now, let’s see what the ups and downs are of buying brand new out of the box:
Pros – New Cars
- Peace of mind – because you are the person to drive the vehicle you will know how the car is driven, where it is driven and under what conditions. You will also know the full-service history of the vehicle from day one.
- Comprehensive warranty, service, and maintenance plan – when buying a new car, you have the option of taking out one, or all of the plans. However, due to right to repair you can choose if you want to take out a service, or maintenance plan. If you don’t take out either of the plans, your warranty will still be intact with the dealership. However, this is when you service your car at a RMI approved workshop such as Autoworks. Check out our right to repair page for more info.
- Little to no maintenance cost – different brands of cars have different warranty periods in place. Should you car show mechanical problems during the warranty than the dealership should complete the repair at no additional cost to you
- You can customize your car – modern cars come out with the latest features and technology. However, because you are buying new you get to decide what interior or technology you want in the vehicle. However, this is dependent on the options available based on the model
Cons – New Cars
- Value lost – new cars can lose up to 20% in the first year and another 20% of their original value in the next two years. This totals 40% of the car value lost in the first 3 years only. For example, if the car is worth R300 000, after 3 years the value will be R180 000.
- The newer the car, the newer the technology – new and improved technology is not always better. New cars that come out with the latest technology generally tend to develop problems later on in their life when they are out of warranty. There are two things that can happen at this stage:
- Recall – this is when manufacturers receive large numbers of complaints from customers regarding the same thing. They will then investigate and recall all the cars sold to repair the issue.
- Out of pocket – if too little people have complained and the manufacturers do not have enough reason to investigate further, then the cost for repair will have to come out of your pocket.
- High installments – if you purchase a new car, you will be paying top price, especially if that car is a recent model. Depending on the deposit you put down for the car would determine your monthly installments to the dealership. This installment could cost you in the region of R15 000 depending on the type of car you are purchasing
If you purchase a new car and wish to sell it a few years later consider the market in that moment. You can do this by checking how much an older model is currently going for. Check how much it was new and how much it depreciated in value. This will give you a rough idea on how much your soon to be new vehicle will drop in value. When it comes time to sell your car, you will be competing with other sellers. These sellers wish to sell the same car as you, sometimes at a cheaper cost. And if you are selling to a second hand dealership, consider that they might want to pay you less than the true value of the car. This is because they will need to make a profit after sale.
Whether you decide to buy a new or secondhand car, Autoworks is here for all of your cars services! If you are considering a secondhand car, then let us do a full and complete check over on your vehicle of choice. We will give you the best advice possible and further assistance in any way we can.
We take pride in your vehicle as much as you do! So, contact us today for a quote and let us assist you!
Latest from our blog
Your vehicle is a complex machine with numerous components working in harmony to ensure smooth operation. Among these crucial elements,…Read More