The one common question and debate among car lovers are which one to choose or purchases the new car or second-hand car. Some will argue that a new car is better and some will say the second hand is better. Either way, this had provided the drivers with the choice to choose the most suitable cars depends on their finance and bank accounts. We will check today on are the pros and cons of both of these.
A new car is without a doubt is higher priced compared to second-hand cars especially for continental cars such as Volvo, BMW, Mercedez Benz, Volkswagen, Audi, Ford, Porsche, and others. The new car price range will depend on the tax and price structure that will be decided by the government at that time. For the owner that had purchased the new cars the smell of the new car is something that will give them satisfaction after they had purchased the car. We do admit that the smell of the new car is beautiful. On the other hand, the second-hand car can be bought with half the price of the new model. The image below shows the list of prices of the second-hand car for BMW 320i and Camry both are in 2013. The price had depreciated from the new car and even though the Toyota model had a better resale value but still they are a drop in the price compared to the new car.
On the other, the new car has a lower bank interest rate than the second-hand car. Where the interest rate for the new car can vary from 1.8% to 2.2% the interest rate for the second-hand car can be from 3% to 4% making it higher. But since the price of the new car is higher hence even with the lower interest rate the price is still higher for the new cars. Let say for example if he or she wishes to buy a BMW 320i new model and paying 50,000 as a down payment the calculation for the new car will be as per below. Note that the price does not include insurance and road tax prices yet.
New Model of BMW 320i 2016
Price = RM 248,000
Down payment =RM 50,000
Calculation = RM 248,000 – RM 50,000 = RM 188,000
Adding the interest = RM 188,000 * 2% = RM 3760
The monthly that need to be paid if the tenure is 5 years
RM 188,000 + RM 3760 = RM 191,760 / 60 = RM 3196 per month
For the second hand model of BMW 320i 2013
Price = RM 168,000
Downpayment = RM 50,000
Calculation = RM 168,000 – RM 50,000 = RM 118,000
Adding the interest = RM 118,000 * 3% = RM 3540
The montly payment
RM 118,000 + RM 3540 = RM 121,540 / 60 = RM 1974 per month
As per the calculation even with the higher interest rate for the second-hand car the monthly payment is still lower if compared to the new car.
For both of these cars, the warranty, for now, is not an issue although for the new car the warranty will be longer since it is a new model. For the second-hand car, the warranty may be or may not depend on the car manufacturer policies and year of warranty. Let say if a person bought a Volkswagen Passat 2016 model with 5 years warranty it can be last until 2021. And the person had sold the Passat in 2018 then the warranty will only for 3 years compared to 5 years on the new model. And the worst thing possible if the warranty had expired and then they are electronic and major equipment failure for the ECU(Electronic Computer Unit) and PCM(Program Control Module) then the owners need to break the bank account to resolve the issue compare to the new car that has warranties in it and they do not need to make a single payment for it.
For the new car, it may or often will be equipped with new technologies and major changes to the cars where on the second hand it will be an old technology or outdated equipment. For example, for the drivers that had bought the Honda Civic second hand will not have the turbo engine that had been equipped within the upcoming Honda Civic model and for someone who had bought the Camry 2.5 second hand in 2013, he will not have the latest Toyota hybrid technologies in the current Camry 2.5 model. Similarly for the continental car especially with new Passat that will be launched by this year that will have the new and improved DSG compare to the old one. So in terms of the latest technologies and innovation, the new car will always have the upper hand.
Since a new car is expected to be reliable for several years the second-hand car may and can be broken down or not as reliable as the new one. This will make the owner spend more time fixing the car instead of enjoying the ride with his car especially if this is a major problem. So to choose the best second-hand car the driver needs to consult with the car expert or test-drive but unfortunately, some of the problems will not be noticed during the test drives and only can be detected after the driver had bought the car. Too bad. Another issue is that the paint on the new car is far more beautiful and quality looking compare to the second-hand car especially if the previous owner had made a paint job when the car had been in accident and paint was done unproperly.
Overall the second hand has its pros and cons and it up to the drivers to choose the best second-hand car. Some drivers had chosen the best second hand that can run for several years without any problem so in this the drivers had made the right choice. Even for the new car some of the drivers will need to spend more time in the service center compare to the time that he spent on enjoying the ride.
In terms of choosing the second-hand car and the new one will depend on the driver preference and the bank account. For the driver that has a big bank account, he will not mind spending a fortune for the new car but for the driver who has a good experience with a second-hand car and does not have a big bank account may be tempted to choose a second-hand car.
At the end of the day, it still depends on the driver’s judgments, passion, likes, dreams, and especially again bank account when he or she wants to choose either second hand or the new one.