If you are looking to buy a new or used car, it is always a good idea to plan ahead so that you get the best deal. Used cars often have higher rates of depreciation because people tend to trade in their vehicle after an average of 3 – 5 years. New vehicles depreciate less as they are more sought after and newer technologies and features are being introduced all the time, but they often come with higher taxes and more expensive financing options.
The choice between a new or used car depends on what you want going forward as well. If you are planning on driving your vehicle for less than 3 years, then it makes sense to go for a used car as this is how long the vehicle generally stays in demand and fairly well maintained.
If your choice is a new car, ensure to go for one with lower rates of depreciation such as Toyota or Honda models if you are looking for a Japanese used car. Most cars depreciate at the rate of 10-15% each year and there is no major difference between new or used cars in this aspect.
A big advantage of new cars is that they generally come with a warranty for up to 5 years and the manufacturers are strict about any repairs that have been done on the vehicle apart from those mentioned in the warranty. This makes used car dealers very careful about making major changes or modifications as it may invalidate their claim if any problem arises with the vehicle.
On the other hand, used car dealers do not offer any type of warranty and you have to be careful about what you are buying as you can easily be duped into buying a faulty or poorly maintained vehicle. This is especially true in places where there are no legal standards for selling vehicles.
To get the best car loans for your car purchase, you should start planning at least 6 months in advance and compare car loan rates since they can vary from bank to bank. If you are going to buy a new car, then it makes sense to go with a financial institution loan as generally the rates are more competitive and better value than through a dealership. For car loans in Australia there are several great online resources you can use to compare rates between lenders and find the best deal.
If you are looking to buy a car that has been used for 3-5 years, then it makes sense to go with car dealers as car loans tend to be cheaper than financial institutions and they can negotiate better deals with their suppliers. On the other hand, if you are looking for a new car, car manufacturers’ car loans are the way to go. If you need a vehicle urgently there are several advantages of buying a vehicle on finance so you can borrow the full purchase price and get on the road sooner.
Car loans are a necessity when car shopping, but they come at different rates from car dealerships and financial institutions. If you’re in the market for a new car or used car that has been driven less than 3 years, it’s wise to go with car dealer financing offers as these tend to be cheaper. However, if you want an extended warranty on your vehicle purchase and don’t mind paying more interest over time then consider going through a bank or other financial institution instead. We hope this article helped give you some insight into choosing whether to buy new vs used cars!
