The Pros & Cons of Buying a Used Car
Buying a used car can be hugely rewarding. It can also be hugely daunting and risky. Make sure you know the pros and cons of buying a used car before handing over thousands of dollars.
In this article, we go over some pros and cons of buying a used car.
Why buy a used car?
Because they’re cheaper. To put it simply. Generally, the reason for buying a used car is to save money. Unless you’re buying a classic or rare car, used cars are far cheaper than when they were showroom new from a dealership.
Private Seller Vs Dealer
You’ll be able to see a range from private sellers and dealers selling used cars.
Depending on your negotiating skills, private seller used vehicles are cheaper to buy. This is because they won’t have any dealer warranties or finance options. However, they often come with the highest risk. Once you part ways with your cash, you won’t have any legal legs to stand on to get it back in the event the car has problems. Make sure you thoroughly inspect the vehicle before buying it.
Tip: Be a good judge of character when talking to the seller too.
Reliable dealers inspect and repair vehicles when they acquire them. This means there’s a high chance the car is in good condition and any damage from the previous owner has been fixed. Make sure to choose a reputable dealer and again, inspect the vehicle. Some dealers offer a (conditional) warranty and even a money-back guarantee.
Used Car Pros…
Arguably the best ‘pro’ is that used cars come with far cheaper prices. Often, you’ll be able to find a private seller keen or even desperate to sell due to a variety of reasons – work on your negotiating skills and get that awesome deal.
Smaller loan amounts
If you finance a used car, the rates might be a little higher than a new example but the amount will be far lower. Make sure to increase your chances of getting approved and shop around. Often, even with higher rates, you’ll end up paying far less overall than a new car with a lower rate.
Do some research on the trim level options and model variants when choosing a car. The difference between the base model and top-of-the-range model can include a number of luxuries, safety and driver assist features, and keep the resale value higher. These can come in handy, especially for first-time drivers. You’ll have to pay a little more but not as much as ‘optioning up’ a new car.
Example: At the time of writing, a base model 2020 Toyota Camry has a price of around $28,990 but the top-of-the-range model – the SL Camry costs around $45,290 – a huge difference.
Used Car Cons…
As most used cars are not in ‘showroom condition’, you’ll have to fork out if you plan to bring one back to such condition. Often, paint scratches and blemishes, damaged front / rear bars and upholstery tears are the most common. Ideally, the seller has kept the car in a garage, serviced and regularly washed.
Tip: Shop around, thoroughly inspect cars and be patient for a good example to come available.
A big risk of buying used cars is the trustworthiness of sellers. It won’t take much online sleuthing to find stories of dodgy sellers rebadging cars to higher spec levels, removing warning light fuses, repairing write-offs and so on. If you’re not confident in inspecting vehicles, consider paying a professional.
Tip: A PPSR (Personal Property Security Register) document tells you the reported history of a vehicle. This includes any finance owing and if it’s been written off or reported stolen.
Although brands like Kia now offer 7-year warranties, many used cars don’t come with them. This is especially true with older models from private sellers. In anyone’s books, having a factory warranty that covers all breakdowns is a huge benefit. Do some research into the conditions and time periods, you may be covered if you buy a later model used car.
Some used cars are MORE expensive than when they were new!
Rare and sought after cars often retain their value and actually increase in price over time. Condition dictates of course. Recently, 90’s Japanese sports cars have shot up in value – rare, mint-condition examples command huge prices. For example Subaru’s legendary unicorn, the 22B WRX. Originally sold for around AU$125,000 when new back in 1998, average examples sell for AU$250,000 in 2020, including a showroom condition 22B selling for over $500,000!
The bottom line:
Get the apps and start searching. Carsales and GumTree are loaded with used cars for sale. You’ll be able to get an idea of prices and filter searches to match your needs. With any used product, there’s a risk attached – especially when there’s no warranty. Reduce your risk by inspecting and test driving the vehicle, getting a PPSR and if you’re still not sure – pay a qualified mechanic to check it out.
No comments yet.