“Do I buy a new car or do I get a used car?” This age-old question shapes driving all over the world. If you are a trust fund baby or a victim of financial misfortune, the choice may be a little more obvious and it may not apply to you. But for the overwhelming rest, this is a serious problem that often keeps shoppers up at night and needs effective guidance. So let’s get started right away!

It’s all about the money!

It’s really quite simple, new cars cost more than used vehicles thanks to a market force called depreciation. For some people, this criterion is enough to make a decision. But wait, there’s more to this story!

It may seem logical that used vehicles should have lower interest rates when financing, but that’s not true at all. Some manufacturers and banks even go so far that you pay zero percent interest on a loan for a new car. Used vehicles are a little more difficult to get a loan, and the interest rates are higher on average. But the silver lining is that the EMI is actually in your favor as the main amount, i.e. the cost of the vehicle, is lower.

Also, on new car sales, the price is generally fixed (at least in this part of the world) and negotiation is not taken into account. But a holiday season or a shopping festival can help lower MSRPs temporarily. However, for used cars, ads on popular websites are tagged “NEGOTIABLE” and sometimes in uppercase. This means that there is some leeway, be it to fit the deal in your head or fit your fetish of beating the seller with his expected residuals. You can even get someone to do a distress sale, which also gives you the opportunity to lower the asking price.

And not to forget the insurance tariffs, which are lower for used cars simply because of the lower capital sum.

The consensus is that a new vehicle loses around 15-20 percent of its sticker price once you drive it out of the parking lot. Some specific German vehicles take a bigger hit. And French, Italian and American vehicles are even worse. You can do your part to help preserve residual value by updating service history, keeping it clean, getting salable paint, but used vehicles, especially those from Japanese brands and those over five years old, tend to lose their value about more than good hold time as a new car.

New car feeling and the color compromise

There is nothing like the shine of a new car. And scratching it in the parking lot or in a traffic accident is like driving a stake in the heart for most owners. But on used cars, it hurts when someone dented your panels by opening the door of the neighboring car too quickly, but not as much. The smell of new interiors is also the reason why people like brand new vehicles, as opposed to a used vehicle, which is often riddled with mud or is accompanied by a fear of mud and muck.

For new vehicles, you can choose almost any color from the brochure, unless they are reserved for certain models or have a color so unique that the dealer is reluctant to bring it for fear of not being able to sell. In this way you can adapt your vehicle to your personality. However, when it comes to used vehicles, you are at the mercy of the market and by that I mean sellers who are likely to sell black, white, or silver vehicles as they are the most commonly bought vehicles. Keep in mind that some of these colors are also great at hiding scratches, so be a little careful while scouting.

Tech and security functions

New vehicles tend to come with an up-to-date array of technological conveniences, gizmos, and gimmicks, such as, regardless of age, most people want the latest and greatest to brag about, if not to take advantage of. New cars make sense to people like that. Some of the boxes may be ticked on slightly older vehicles, but they may not support the full range of functions. For example, some have Bluetooth technology that supports phone calls but doesn’t stream music. That being said, you can get aftermarket parts and update your vehicles with things like portable sat navs, parking sensors, or even a rearview camera and monitor.

Much like the technology, the new car has more compliant safety technology that is in line with today’s regulations, like crash values, more airbags, updated versions of things like ABS, and smarter or smarter features like lane departure warning and assist, forward collision warning and assist, etc.

Performance curve

Since there is a run-in period that has been minimized or even eliminated by most manufacturers, performance and efficiency will only increase with increasing kilometers, at least for the foreseeable future. In the case of used vehicles, a decline in these numbers is to be expected, especially in the case of cars with a mileage of more than 100,000 km. In addition, with older vehicles you never know how the vehicle was handled, whether the driver drove with lead or whether he changed the oil on time, which also removes these figures further from the manufacturer’s information.

Warranty and Modifications

The big advantage of a new purchase is a comprehensive warranty that covers not only the battery and the wearing parts but also bumper to bumper of your vehicle. And they are usually valid for three to five years; The latter is especially true of some Korean and Chinese brands. That kind of peace of mind is priceless for some buyers. If you are lucky, you may find something suitable, guaranteed by a private seller; and while certified used showrooms come with a guarantee, they usually don’t last long (usually a year) and coverage isn’t as extensive.

Buckling up a turbo and changing the suspension parts will almost certainly void your warranty on a new car. Enthusiasts who would like to tweak or tweak their ride should avoid this situation. The same goes for the average buyer, as the warranty is seen as a safety net, some sort of insurance against poor build quality or missed quality checks on the production lines … even if the vehicle has a bulletproof reputation like a Toyota or a Honda. With a used car, you have the option of customizing your vehicle to suit your performance and your aesthetic eye. A guarantee that doesn’t exist can’t hurt!

The judgment

We have something to say to everyone! Everyone lives a unique financial life and their requirements can be different. When you have the batter and prefer a relatively hassle-free vehicle, opt for a new one. But for most, the sweet spot may be a few years old, with a few thousand clicks on the odometer wiping out the new car price while maintaining the security of a valid warranty.

wknd@khaleejtimes.com