So it’s time to buy a new car! Shopping for a new car can be painful at times, but it’s also the best feeling when you get to drive away with a shiny new toy (even if it’s a used car).
There are a few things to consider when it comes to deciding whether or not to buy a new or used car, especially with the car market the way it is right now.
We’ve put together a guide with things to keep in mind when shopping for your next car.
Buying a car during a pandemic
Before we kick off talking about new and used cars, we thought it’s worth covering some important considerations in the car buying market right now.
Due to the pandemic, there has been a huge shift in car values when comparing new and used cars.
The global car production industry is experiencing shortages of stock and limited international transport, which is resulting in long wait times for new imported cars.
The lack of access to new cars meant some people who couldn’t wait, turned to used cars. The huge influx of demand for used cars has caused used car prices to jump quite dramatically. When looking at brand new versus used cars, the price difference isn’t that big at the moment.
According to the ABC, used car prices are 37% above the pre-pandemic costs from February 2020. Those with the luxury of time, have interestingly enough decided to pay the small difference and get a new car showing a 68% increase in new car sales since May 20201.
Either way, we’ll break down what to think about when buying a new or used car.
Buying a new car
Buying yourself a brand new car can come with a number of perks (not just having a brand new car to show off).
The benefits of buying a new car include:
- Servicing packs. Usually dealerships will allow you to purchase future services at a discounted rate up front. This can save you lots of money! It can be worth budgeting for this in your purchasing price.
- Warranty. Things can go wrong, but it’s nice to have the warranty there to keep you covered when you need it.
- New technology. It’s 2021, more often than not, we want all the bells and whistles. New cars are being updated every year with new technology and features for you to enjoy.
- Fuel efficiency. As the world continues to look at ways to fight climate change, so do car manufacturers. Each car that is developed is always being optimised for the most fuel efficiency. There’s also plenty of completely electric or hybrid options on the market now too.
Right now, experts are encouraging people to buy new cars. If you’re on the hunt for a fairly big upgrade from your current car, a new car might be the way to go.
Another benefit for buying a new car is that you may have access to better rates through car loans designed to reward you for owning vehicles with lower emissions such as our Green Car Loan.
Some of the more popular ‘green’ cars include:
- Toyota Corolla
- Hyundai i30
- Mazda 3
- Mazda CX-5
- Most Toyota RAV4s
- Most Volkswagen Golfs
- Kia Cerato
- Mitsubishi Outlander
- Most Nissan X-trails
- Mitsubishi ASX
- Mazda CX-3
- Most Honda CR-Vs
Car manufacturers are shifting to more environmentally friendly cars so this could be your chance to shift towards helping the environment when it comes to emissions.
Buying a used car
If you’re not interested in buying a fancy new car and just want a car to get you from point a to b, a used car might be your best option.
Typically when you buy a used car, the previous owners have taken most of the depreciation hit.
In light of the current pandemic and its impact on the car manufacturing industry, this may not be the case as prices can be quite high.
That doesn’t mean you shouldn’t get a used car. There are some things to look out for or consider when purchasing a used car such as:
- Used car loan rates are usually higher. Sometimes car loan rates can be higher than new car loan rates. If ongoing costs are a concern, this is something you should investigate before you go out looking at cars.
- Check if the car has security interest against it. Some people may try to sell cars that still have money owing on them. This means if you then own the car and the car needs to be repossessed because of the old owner’s debt, then it can be taken off you. You can check the car’s financial status on the Personal Property Securities Register.
- Make sure it hasn’t been in an accident. Car accidents can cause significant damage to the integrity of a car’s structure and end up costing you in the long-run. You can check whether it has been in an accident or stolen via the Personal Property Securities Register.
- Get a mechanic or car expert to assess the car. Whenever buying a used car, it’s always worth bringing someone along who can have a look at the car. Whilst a car might pass a roadworthy, it doesn’t mean it might not have problems that you’ll need to fix later on.
- Ask for records of the services if they have them. Depending on how old the car is, you might be able to access a record of log book services across the life of the car. This gives you a bit of an indication of whether it was regularly maintained.
Usually with private sellers you have to be a bit more guarded than usual as you can’t assume the seller is always being honest. Make sure you do all your homework and negotiate where you can.
If you’re simply looking for a car to buy and you are after a car immediately, a used car might be your best option.
Depending on your needs, we have a range of car loans that you can check out that may be suitable for your needs. We have loans for everything from new to used cars and for those who go down the eco-friendly car route and want to be rewarded.
Happy car shopping!