To Buy A New Car or A Used Car? What to Consider?
You saved enough money and now you are finally ready to purchase your first car. What kind of car are you buying? Do you want a new car a used car? What is there to consider when purchasing either a new car or a used car?
Both used car and new car have their own strong and weak point so in order to buy the car that suits you, you need to consider several factors before finally getting the paper done and drive your car off.
1. Loan
A loan is one major thing to consider when buying a car, well unless you are very strong financially, then I don’t think it would be a problem for you. Yet, I think you will still want to know how you can save more for your car.
Well, unless you can pay your car in full in one shot, you will need to take a bank loan. Here is what that is important. New cars are normally offered with lower interest rates, around 2.3% to 3% while a used car’s interest rates are higher, around 3% to 4% depending on the time and banks. If you are buying a new car, there are car manufacturers that have partnerships with banks that can offer you better rates to boost their sales.
We’ll still recommend you to compare those rates with the other bank yourself. Who knows among the better deals, there is one that is the best.
2. Down payment
There are regulations in Malaysia that there is only a maximum allowed loan of 90%. This means that you will still need to provide a minimum of 10% down payment upfront. With the high loan, you will result in a high loan pay back every month or be having a long loan period. The difference in this situation is, if you were to buy a new car, there is often a warranty for your car to help you lessen the financial burden.
As for a used car whose warranties had expired, the situation wouldn’t be the same therefore the financial burden is often “heavier” if you purchase a used car that needs some repairs.
It depends on personal opinion but if you can take a lesser loan and pay more for the down payment, you will save more in the interest rate and shorten the time of the loan payment. Good luck considering this option.
3. Car depreciation
A car’s value will depreciate over time, doesn’t matter if it is a new car or a used car. The only differences are the speed and the amount of depreciation. Do you know that for a new car, the earlier you sell your car, the more money you possibly lose due to depreciation? A new car can depreciate around 30% of its value in the first year and the percentage decrease every next year.
As for a used car, their values depreciate less than a new car. If you get a really well-conditioned used car, you can be considered lucky as you will not need to worry much about the depreciation value and still get a good car, only that it is not a new car.
4. Waiting time
Waiting time means the time you need to wait to get your car from the moment of signing off the papers to getting the keys to the car you bought. When you buy a new car, unless there is ready stock, you will need to wait for the car to arrive. It could take months for a car to be imported unless you buy a locally manufactured car, then the waiting time will be shorter.
If you buy a used car, there is the possibility that you can drive the car home after signing the papers, given if there is no issue with the papers and the car.
So, guys, those are some of the things that you should consider if you have a hard time deciding whether to buy a used car or a new car. It is important to make the right choice, most importantly one that will make you satisfied. We wish you well with the car you are going to buy, no matter what car it is. And If you know any other things to consider, share them with us in the comment section too.
Remember,
“In the end that was the choice you made, and it doesn’t matter how hard it was to make it. It matters that you did.” - Cassandra Clare
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