Brand New Car Vs.Second Hand Car
Don't flip a coin and decide if you need a used or a brand-new car. Priceprice.com has just collated an adequately detailed discussion between the perks of choosing and owning a spanking new or a second-hand car.
The brand-new cars' prices in the Philippines have notoriously gone up in 2019, sending local consumers to abandon some of their dreams to buy a new car. No thanks to the higher excise taxes imposed by the TRAIN or tax reform law, Filipinos who still harbor these dreams are now finding harder to afford a new car than a few years back.
Consequently, second-hand car dealers in the country have already expected more Pinoy buyers to get lured in the used car market. Such indulgence is quite sensible as this specific market comes with limited to the more affordable options. For one, used cars are logical, less expensive alternatives to new cars.
And so, one asks the more pertinent in this journey: Are second-hand cars indeed a wiser purchase than brand-new vehicles? Now, as ascertaining if it's a right choice differs from one car buyer to another, we're here to lead you whichever route you choose to take, whether you're about to buy a second-hand car or still on the hunting for a new one.
- Why Buy A Second-Hand Car?
- Why Buy a Brand-New Car?
- Top Five Factors to Consider When Buying a New Car
- Top Five Things To Consider When Buying a Used Car
- Conclusion: Brand New Vs. Second Hand
Why Buy A Second-Hand Car?
If you're already checking out some second-hand cars in the Philippines, the reasons below should finally convince you to take one:
1. Budget Vs. The Desired Model's Price
As an individual buyer, it's only customary that you're already eyeing a specific vehicle. But as most brand-new versions typically don't fit your budget, consumers are often faced with the next option, which is going for a pre-owned unit sold right a less pricey amount.
Nowadays, going for a second-hand car would save a buyer around 10% to 70% off a vehicle's original price tag. The price should vary depending on numerous factors, such as condition, age, and mileage. Should your budget permit, upgrading to a better model is also a possibility.
2. The Preference for Paying in Lump-Sum Cash is a Viable Option
The choice to pay interest, alongside monthly installments, is almost always inevitable when buying a new car. When you're on the hunt for a used car, however, there is that option to pay it in full amount in cash. For most, this is a viable alternative that is also more convenient.
3. A Phased-Out Model Can Be Purchased
Our third benefit should especially delight the country's resident vintage car enthusiasts. As it is, this should disappoint those who want to drive home a particular classic or discontinued variant as this option isn't present when buying a new car.
This also certainly rings true to buyers who happen to come with a limited budget but with a penchant for owning a vintage car.
4. Lower Insurance Costs are Provided
On paper, it only costs significantly less to insure a second-hand car than a brand-new vehicle. Under the same thought, these car insurance corporations consider a car's age, plus their fair market value, when a car's insurance premiums are computed. In essence, the higher the value your vehicle is toting around, the pricier it will be when it gets repaired due to collision.
Currently, several insurance providers do not accept applications for cars that are older than ten years. So, if you're trying to purchase a second-hand car, this must be considered.
Why Buy a Brand-New Car?
Despite the skyrocketing prices in today's local automotive market, people are still expected enamored by the lure of a brand-new car. The reasons are as follows:
1. A Car Loan Is Still As Beneficial As Ever
Now, while a full payment on a brand-new car should save a consumer from paying interest, the benefit of going for an auto loan is still a considerable weight off these buyers' shoulders down the line. The monthly amortizations aside, a longer repayment term is also guaranteed.
In the Philippines, the interest rates for brand-new cars are lower than the second-hand units. In local banking institutions such as BPI and BDO, they offer longer loan terms than the provisions one might experience when buying used cars.
2. Buying A New Car is Less Complicated
Buying a second-hand vehicle takes a lot more time and effort than just going for a brand-new one. From researching your alternatives, right down to actually making the purchase, the journey is equivalent to a hassle. No salesperson would assist you, much less do all the legwork.
All of that can change when one considers purchasing a brand-new car instead. Once you can pick a specific model, all you need to do is head to a showroom and schedule a vis-à-vis with a sales representative.
And voila! A tremendous amount of time and energy throughout the frequently tiresome process of car purchasing is mainly saved.
3. Say Goodbye to Frequent Repairs and Maintenance
Without going for the obvious, the most significant advantage of purchasing a new car is without a doubt its zero defect. And if there is ever any, such a vehicle is readily covered by the car manufacturer's warranty.
The hassle of going to the auto repair shop frequently, on the other hand, is only one of the inconveniences of owning a used car. Next in line, of course, is the cost that comes with it as old car parts are expected to wane in the process than the new ones. These disadvantages triple in annoyance when one only relies on this very car.
4. More Savings on Gas
One can only expect tip-top fuel mileage in newer car variants than older models. Whenever you're already at the point of reducing fuel costs, the universe should tell you that buying a new car is far more logical relative to this need.
Still, older models in terms of fuel-efficiency shouldn't be disregarded in this department as there is very much a slew of contenders that fall under this perk.
5. Benefits Those Who Are Such a Stickler for Their Cars' Longevity
If you happen to be one of those who want to keep your car until the end of time, then buying a brand-new vehicle makes more sense in this regard.
The reasons couldn't be more obvious. The resale value of new cars is easily a feature that can be swept under the rug. But for one who intends to sell his or her vehicle in the foreseeable future, its pricing is something that must be considered.
Top Five Factors to Consider When Buying a New Car
If you're already decided and ready to deal with buying and owning a new car, key factors to consider in the process are only but a natural development to follow suit.
The things right below are some of the crucial factors that you must consider:
1. Residual Value
As we've mentioned above briefly, the resale value of your new car is something you must take heed of should you be already harboring plans to resell it in the future.
For the uninitiated, the resale or residual value of a car is also known as the value of the vehicle, which is expected to depreciate over time.
When taking a good deal out of your new car's residual value, it is essential to determine which cars are launched alongside similar vehicles in the market. This is due to the lingering fact that depreciation happens ever quickly, despite your car belonging among the best-selling ones if it is announced with competitive entrants on the automotive market.
The best way to counter such inconvenience in the future is to allot time to do some research first. Subsequently, determining which cars boast the strongest of resale values must be inquired.
2. Cost of Ownership
Another thing to consider when buying a new car is its additional ownership costs. As it is, it is a must to know the price of its accompanying insurance, plus its fuel and maintenance, as these can all add up in years to come. For most, their car expenses shouldn't go beyond more than 15% to 20% of their total monthly budget.
Like the crucial first factor above, it is paramount that you check with your insurance company first to determine the expected modification of rates over time. This is especially needed as premiums get hiked up, depending on the variant and make of the car. In essence, the pricier your vehicle is, the more it should cost to insure.
In this regard, it is also essential to know that fuel-efficient vehicles save a considerable chunk of money in the long run. As such, you must know the pertinent details surrounding the essentials of fuel economy in a car to reduce your costs of ownership effectively. The same can be said with your car's maintenance costs. As an owner of a new car, one must have the know-how of the price and availability of its replacement parts, alongside consumer reports.
3. Incentives and Trade-Ins
For you get the best of your new car's incentive and trade-ins, you must first know when a dealer would clear out its inventory. Prospective buyers should also look into as to when these dealers would offer low-interest loans and other rebates. In the Philippines, these perks are usually up during the holiday season.
4. Price and Financing
Research is also vital when one should want to know the best rate of a new car. In the same vein, buyers must even understand the importance of perusing price comparisons, plus a detailed set of budget guidelines. When all of these are combined, the result most often ends at getting a reasonable price.
Top Five Things To Consider When Buying a Used Car
Like brand-new cars, the journey to finding the best-used cars is next to meticulous. But this route shouldn't be that complicated when one is equipped with only the right things to consider.
Right below are what we think are the most important if you're bent on getting one:
1. Test-Drive The Car
Akin to brand-new cars, buyers are also encouraged to take their chosen used vehicles for a test drive. Driving them at 40 to 50kph while stepping on the brake firmly yet smoothly would tell you a lot of things.
For instance, when there is any vibration that emanates from the brake pedal would mean that there must be an underlying issue with the car's brake rotors or might require new pads. Or when a used car swerves when you brake, that could also equate to aging steering components.
2. Check, Check, Check!
After test-driving the used car, a whole lot of checking must be performed. We've tallied the components that are crucial when checking is employed.
- The body
Clean the car first, then inspect thoroughly. Check for any rust on its surface. If there is any, that could indicate that the vehicle has been exposed to rain that often. Also, look for discoloration and scratches.
- The engine bay
Under the hood itself, you can tell about the car's overall body and engine.
- The undercarriage
The car's bottom could also allow you to see possible rust accumulation. A car lift or an inspection pit should let you check underneath it.
- The tires
Uneven wear on all tires should be an indication that the tires have not been appropriately rotated. Worse, this could also be caused by a bad wheel alignment due to varying reasons such as worn steering or even frame damage.
- The interior
If you're quite a stickler for style and convenience, you must know by now just how crucial it is to snoop around your used car's interior. Check for lumps in the seats as these are indicators that the interior has experienced a flood.
Conclusion: Brand New Vs. Second Hand
Preference and financial capability are but the most vital things that should dictate whether you'd end up with a used or a brand-new car.
Going for a brand-new car should almost always tie buyers up with a monthly amortization that can go beyond five years, relative to your downpayment. If your job is stable and your credit is history is right, and you are confident that you will thrive in it, then there's no question that a new car is for you.
But if you are one of those who are opposed to the skyrocketing prices and grueling monthly installments, chances are you're already eyeing on the best-used cars in your neighborhood.
Ultimately, it is always encouraged that you go and study your options first and make your resources be the determinant of your future decision. Whichever route you partake, we're sure that it is going to be all justified.
USED CAR BUYERS GUIDE LIST
Before Buying a Car
- What is the difference between buying a new car and a used car
- What are the different kinds of body types?
- Does older means cheaper?
- How does mileage affect a car?
- What has been repaired from my car? What must I check?
- Is a customized car more expensive?
- Buying a Used Car
- Selling your Car
Car tips & Maintenance
- What happens when you don't change the oil in cars?
- When do you replace the brake pads?
- Is there a proper way in mainting a car aircon?
- Do I need to learn both AT and MT?
- How many years does a car battery last?
- Can I pick any tire size for my car?
- Are car insurance only for new cars?
- How do I handle a car accident?
- How do I know the meaning of the alert indicator signs?
- What is the proper way to drive?
- What is the correct way of washing your car?
- How do I know how my car delivers the power to the wheels?
- Should I turn my hazards on during rain while driving?