The pros and cons of buying a new car or a used explained. Image: iStock
Regardless of whether you are buying new or used, forking out any amount for a car is a big commitment you will have to abide to for the length of time you plan on owning it.
It is in this regard that a number of aspects need to be considered such as the type of vehicle, brand, how much you are willing to spend and as mentioned, will it be a new or used car.
What needs to be kept in mind though that you will most likely be paying the vehicle off, so careful consideration needs to be given so that you don’t run the risk of, for fear of a better description, bankrupting yourself on car payments.
With this in mind, Wesbank has advised the following that should be looked out before the eventual decision is made.
“It is important to shop around and compare car prices to find a sensible and affordable car that fits within your budget.
“Don’t forget to budget for fuel, insurance, tyres, service costs and more and remember that these costs can change over time. It is also advisable to build some leeway into your budget to accommodate for rising fuel prices, interest rate increases and unexpected costs associated with driving,” WesBank advises.
One of the biggest pitfalls buyers often fall into, is where the vehicle is bought form, especially in used form and not from a major manufacturer franchised dealer.
Regardless of what the listing for the vehicle might say when viewed online as the case will most likely be, the simple answer to avoid being taken for a ride or scammed, is to visit the establishment where the vehicle is being sold from and to get a first-hand experience of it and the dealer.
ALSO READ: WesBank: Expect vehicle prices to come down again soon
“If a deal seems too good to be true, it normally is. It might be tempting to buy a newer, fancier car advertised at a low price by a small independent dealer or private seller, but you must let common sense prevail,” Wesbank says.
“There is likely a reason why that car is priced the way it is, and you might run into issues with it down the road. It’s safer to do business with reputable dealers who will go to great lengths to protect their reputation through quality products and customer service.”
As has been known for well over 12 months, new cars sales have been hamstrung by supply shortages and longer than normal waiting times as a result of the global semi-conductor crisis that hit the industry with considerable force after the pandemic.
This resulted in a sudden spike in the demand for used vehicles, or dramatically inflated prices of newer vehicles that are available.
According to WesBank, while no wrong answer prevails as to whether you should buy new or used, understanding the pros and cons of each is what ultimately make sense.
“It’s a simple case of supply and demand, and dealers are understandably charging more for used cars they can source for stock than they might have before the pandemic. However, beware of paying too much,” it warns.
“Do your research and make sure you’re not paying too close to a new retail price for a pre-owned vehicle.”
The upshot of buying a new car is exactly that; you are it’s first owner and apart from knowing this, it comes with a “clean” warranty record and in some instances, a service plan that covers the vehicle’s maintenance over the prescribed timeframe.
Besides this, a further benefit is that despite the vehicle’s recommended list price, dealers are always willing to dip a bit lower or include incentives to sweeten the deal.
“These can range from discounts on models that are soon to be replaced with new ones, to preferential interest rates and the flexibility to offer generous trade-in assistance programmes and more,” Wesbank states.
“While these incentives are obviously designed to lure buyers in, they can pay off in the long run in some cases. Just don’t be swayed into a purchase because of a free braai set or branded cap.”
While the notion of buying a used car might not be viewed as a plus to everyone, the benefits are still prevalent.
Besides the price difference relative to a new car, many pre-owned vehicles, in some cases, still feature the remainder of their warranty and/or service plan and specified options the original owner had installed at considerable cost.
In addition, vehicles that often fetch seven figure prices are prone to heavy deprecation, which could make them a bargain if proper care has been taken.
“Used vehicles almost always suffer less depreciation from purchase price than a new one. In other words, the original owner, who bought the car new has already incurred a significant amount of depreciation simply by taking ownership,” Wesbank continues.
“When buying a used model, you’re starting off from a lower initial outlay and the effects of depreciation are felt less in your wallet.”
It, however, warned though that although worthwhile deals on older vehicles are present, care needs to be taken as the vehicle gets older.
“Try to identify cars with full service histories, and even better are those with full histories at official franchise dealers. Also, try to take a trusted mechanic with you to view an older car to make sure there are no major issues before taking delivery.”
For more information, visit www.wesbank.co.za or Facebook.com/WesBankAssetFinance.
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