New or used cars: What are your options?
When deciding to purchase a car, you will need to decide whether you are looking for a new or used vehicle. Doing your research can help you work out which car meets your needs.
When it comes to buying a car, it’s easy to get excited at the thought of owning the latest model with new features or leather seats. However, if you’re considering an older model then a used car might work for you. Here are some tips to help you decide.
Buying a new car
It has to be said, there’s nothing quite like the feeling of owning a brand new car –not to mention the new car smell.
With a new vehicle, you can choose a model with the latest features, obtain a new car manufacturer warranty that typically lasts between three and five years and, depending on the dealer, you could access capped-price servicing.
You also get to choose which optional features you want on your vehicle, such as the trim, colour, wheel upgrades and more. In short, you can choose the features you want, and the new car warranty can also provide you peace of mind.
New cars tend to break down less than used cars, and if serviced according to the manufacturer's requirements, should remain mechanically sound.
Brand new cars can lose a significant percentage of their value due to depreciation within the first few years of ownership. Depreciation rates can vary depending on the make and model of the vehicle.
Buying a used car
You might also consider getting a car loan to buy a used second-hand car.
If the car is only a couple of years old, it might still have a valid new car manufacturer warranty and also access to capped-priced servicing.
When choosing a used car you’ll have to take the car as is. There are usually many used cars available for sale in the market, so take the time to look for a car that suits your needs and budget.
You can choose to purchase a used car from a licenced car dealer, through private sale or via an auction.
Buying a car from a private seller
You may get a good deal buying through a private seller but other than making sure you are giving the car a thorough check, it's also important to test drive the vehicle, and get the vehicle assessed by a professional mechanical inspector. Private sellers are usually more eager to sell their vehicles as soon as possible and are typically more flexible on price during negotiation, however buying privately requires relying on your own judgement.
There are a few things you need to be wary of when buying a car privately. Here are some pre-purchase checks you should do:
Check that the seller is the registered owner of the car
Make sure the car you are considering, is the one covered by the registration papers
Check the registration is valid
Do a PPSR check
Buying a car from a dealership
Buying a car through licensed dealers may be more expensive than from a private seller but it can offer you greater protection.
Car dealers must only sell cars that have no money owning. All cars sold from a licensed dealer should include a car description form which has important information such as the dealer’s name, cash price of the car, VIN and engine number, mileage and warranty details where applicable.
You should check that the information on the form reflects the actual details of the dealer and car, just as you would with a private seller’s certificate of registration. It’s also a good idea to do an inspection on the car before you buy, especially if it doesn’t come with a warranty.
Here's what you can get when you purchase a car from a licensed dealer:
- You'll receive a statutory warranty that guarantees the car is mechanically sound, and that most mechanical problems will be resolved within a certain period of time. Depending on the state you live in, the warranty and its conditions will vary, but largely depends how old the car is, its existing mileage and selling price.
- Dealerships can provide specialist advice about the right kind of car to suit your needs and budget.
- The dealership handles all the paperwork, including transfer of ownership to checking its registration, saving you a considerable amount of time.
- The dealership may be able to assist you with financing and insurance options.
- You could possibly trade in your old car with the new one.
- You are entitled to a cooling off period should you change your mind. Note that there is no cooling off period for new vehicles. Cooling off period varies depending on the state you live in. Check with your licensed car dealership before signing on a contract.
Buying a car at Auction
Cars purchased at auction are not covered by a dealer guarantee and normally you can’t take it for a test drive. You should arrange an independent vehicle inspection prior to the day of auction.
Need a new or used car? We're here to help.
There are many factors to consider when buying a car and deciding which vehicle suits your needs. Whether you choose a new or used car, if you need to finance your car purchase, choosing the loan that is right for you is also important.
Our job is to make it easy to get your hands on the wheel of your new choice of car. So, we've made it simple with our range of car loan options. We provide both secured and unsecured car loans.
Need some help with your car loan?
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