Times are tough and there’s no doubt that money is tight for everyone. One of the costs everyone needs to be aware of, is that of transportation. It is, after all, one of the biggest expenses we all have.
If you live and work in an area where walking and public transport isn’t an option, then you likely need to own a car. But you don’t need to own a new car. A used car will get the job done just as well as a brand new one.
People are choosing to buy used cars
More and more people are choosing to buy used cars. They’re seeing how much more valuable a used car can be. If you’re looking for reasons to buy a used car rather than a new one, think about these: lower prices, slower depreciation and increased payment flexibility.
Says the AA: “Before launching your search for a good deal on a used car, spend some time considering many of the same factors that would apply to a new car purchase: how you will use the vehicle; how long you plan to keep it; the size, style, features and appearance you need or prefer; and your budget or financing options for the purchase, as well as for operation, maintenance, and repair costs. Know your financial limits and secure any needed financing before beginning your search.”
Knowing the risks of buying secondhand
Along with the advantages of buying secondhand, there are a few risks. A used car might very well have mechanical or structural difficulties which you won’t know about immediately.
Said the AA’s Gary Ronald: “In order for a car to be sold voetstoots, a full list of all known car defects has to be provided. As part of the sale agreement, you, the buyer, would then have to sign and acknowledge the presence of these defects.”
Another possible problem of buying an older car is that parts might be difficult to find or more expensive than the more modern versions. It’s up to you, as the buyer, to make the most of the advantages of buying a used car, like the lower cost, while keeping yourself fully informed about the possible disadvantages.
There is no doubt that buying a used car compared to buying a new car is going to be less expensive. Cost is a key driver of used car purchases in Gauteng and across South Africa. A new car typically loses up to 45 percent of its value within its first three years. So, when you buy a used vehicle, you aren’t paying this upfront premium on the product only to see it lose value right away.
Another cost advantage with a used car purchase is lower insurance premiums. Insuring a used car costs less than coverage for a new one. Taxes and registration fees are also usually lower for a used car.
It is really true that once you drive a new car off the showroom floor, its value will drop instantly. Cars depreciate steadily over time, but the steepest decline usually happens within the first two years of ownership. In rare instances, some models can even lose 40 percent or more of their value in the first year. With a used car, there is still depreciation, just a lot less rapidly.
Improved reliability with certified pre-owned programs
A new car starts to lose value as soon as you drive it off the lot. Unless you are dealing in very high-end collector cars, every car you ever purchase will lose value pretty quickly. Some statistics suggest that by the fifth year of ownership your vehicle has lost 65 percent of its value. Certain cars depreciate even faster.
The things you need to think about
Buying a used car means you’ll need to think about many of the things you would have had to think about if you were buying a new car. Some of these factors include:
- How much you can afford to pay for the car.
- How much you can afford to pay each month for its operating costs.
- What will you be using the car for?
- How long do you intend keeping the car for?
- Are there any particular styles or features that you’re looking for?