Are used cars a better investment?
Author : teriannI need a new car. So I started thinking about my options. Should I buy a used car or a new car?
Like many consumers, I like new cars. There is a smell that emanates from the interior of a new car that is most appealing.
There is also the delight in knowing that you are the first person to own the vehicle that gives me a thrill.
The exterior of a new car also adds to its appeal. The body of the car usually glistens and the paint job is immaculate so there is no need to try and take out any ‘scratches’ or ‘dents’.
The best part of owning a new car is also that they haven’t had time to be worn down on our roads as yet so there are no suspension or front end concerns.
Disadvantage of buying a New Car
Of course there is always the other side of the coin as not everyone can afford the hefty price tag that comes with the purchase of a new car.
Depending on the make and model of the vehicle, new cars can range from $1 million – $3 million and those are conservative figures.
Loans
I am a firm believer of not accumulating debts. If you are going to take out a loan to buy a new vehicle, you must consider your options.
If your salary is $80,000 after tax, it makes sense to take a loan that will be affordable to repay.
In order to accomplish this it might suit you to leave the gas guzzling SUV’s alone and aim for a smaller car.
Used Cars
The main advantage with buying used cars, is the lower price consumers will pay for the vehicle. Consumers must beware of those unscrupulous persons who are selling cars that they do not own.
A thorough check of documents before any commitments are made would be advisable in order to avoid any disappointments later.
Some mechanical problems can also affect older vehicles so that must also be taken into consideration.
What do you think? Let me hear from you!
Teri Ann Renee Paisley
Gleaner online writer
Tags: used cars
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10 Responses to “Are used cars a better investment?”
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The initial price tag may be appealing but there are other costs that one will have to contend with. The main one is insurance. I bought a used car two years ago. It was the first vehicle to be registered in my name even though I had been driving for 11 years prior. My driving record was not taken into concern when the premium was calculated. I remember approaching a broker with a list of vehicles I had in mind to purchase. Regardless of the vehicle, my insurance coverage was between $180,000 and $210,000 comprehensive. My lowest third party coverage for the vehicle I eventually purchased was $72,000 and while I have received bonuses, without them, I would be paying almost $80,000. The explanation in a nutshell? High theft vehicles attract a high premium because of the risk. Vehicles that are not high theft most likely are rare (which is the route I chose), which means, because I am male and under 30 and WILL crash, the parts will be hard to find, so I need to pay a high premium anyway to ship in parts in the event that I DO crash. This was the explanation I received for all vehicles (turbo or not).
Cost of fuel, registration, fitness and service parts will all seem to come down on you at once if you do not educate yourself properly on vehicle maintenance and effictive budget development.
In my view, the costs you may be saving in buying a used car will be used anyway in overall care and maintenance, or an effective alarm system.
The best advice I believe one can give (not that anyone is asking) is “If you cannot afford two, you cannot afford one.”
“New” cars are a bit of a fallacy. By the time you get your new car they will have been driven by quite a few people and depending on the model you buy could have accumulated many km on the clock. Manufacturers and dealers can disable odometers until point of sale.(I bought a new car once and could never understand how they had managed to take it for a test drive before I collected it and have the odometer at zero!) New cars may have been sitting for months, sometimes years, in a huge parking lot while waiting to be shipped. Shipping containers are the best moisture boxes n the world so they will have spent weeks or months being in a damp environment. And for all of this privilege as soon as you drive the car off the lot it depreciates by up to 30%. Best to stick to a second hand car unless you have more money than sense.
Thanks for your take John, I suppose that is another way to view ‘new’ vehicles!
Actually I wanted to hear your opinion DC and I think you have made valid points as some times you save money initially only to end up paying more in the long run!
Very thought provoking responses from John and DC.
I am in the fortunate position to be able to choose. Maybe my choice has been tempered by the fact that I’ve had 4 brand new vehicles while working in Europe and enjoyed all the supposed benefits of such. My beloved Audi cost more than the house I now live in in Mandeville. It was not long before the warm inner glow of looking out of the bedroom window and seeing it parked in the drive turned into a bad taste in the mouth at the huge lump of depreciating consumerism parked there just eating money while standing still. So when it came to my first JA purchase I chose used. Firstly there is the massive depreciation on a new vehicle the moment you drive it away from the dealers. I cant think of any other material possession (in the world) that depreciates faster. Then there is the new car smell, well actually you can purchase at least one little spray that I know of that give the new car smell in the oldest of old bangers. The cost of parts for a new vehicle in the first years of its life are also horrendous be they mechanical repair or a repairable prang.
So I chose a used vehicle but I did apply some very important rules. Firstly find a good reputable local mechanic. Engage him in the purchase process before parting with a penny – not afterwards. Decided how much I wanted to spend / could afford and then subtract at least 20 percent and bank that for repairs and maintenance. Be patient and not jump at the first vehicle that meets requirements. Have no trust or faith in the seller be they private or business. Be ruled by the head not the heart. Do not be swayed by a clean and tidy body work, nice though it may be its not the body work that makes the car reliable and trustworthy. Jamaicans are car proud and have a reputation for keeping their cars clean often overlooking basic water oil and tyre maintenance and such like. I could go on but its sounding like a used cars buyer’s guide which it was not intended to be. So I will close by saying that following these rules and a few more, I have a nice 1998 Honda CRV, reliable as the night follows day. My trusty mechanic, not and expensive dealer with all their overheads, collects it from my house every year gives it a once over and takes it for its fitness. He feels almost as much responsible for its good running as I do. The one time it let me down in Porus on the way back from the airport at night, one call and he turned up and took me and the family home and the car in for surgery and TLC. No wrecker or tow truck fees. When the wife parked it against a wall one day it was down to the scrap merchant for a second hand replacement headlight assembly and for a significantly less than retail. We all love Dracular it’s a member of the family. It hardly depreciates anymore and it certainly has not cost the price of a reasonable dwelling. Should Dracular ever expire it will be another used vehicle for us.
Thanks for sharing your experiences with purchasing both old and new vehicles. I think you have presented a reasonable explanation for your decision to purchase used cars.
Each day, there are companies targeting consumers with poor credit histories with promises that they can clean up a credit report so that consumers may purchase a new car or secure a home mortgage loan. Of course, you must pay a fee for this service. Unfortunately, these companies cannot make good on these promises. The truth is, no one can erase accurate negative data from your credit report. After handing over your money to these unethical companies, you are still left with the same negative credit history.
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Oh my goodness! Impressive article dude!
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