Step 2: How do you choose between a secondhand car and a new car?
|Factor||New Car||Used Car|
|Buying convenience||No need to worry about evaluating the condition of the car||Can’t be sure of the condition of the car|
|Purchasing Fee||Price is all inclusive, dealer will handle the loan and insurance applications for free||Price quoted doesn’t include the processing fee which will vary from dealer to dealer. Make sure you check beforehand to understand specifically what your dealer is charging you for.|
|Repair and Servicing Costs||
Major repairs in the first two years are unlikely if the model is reliable, plus the cost it may be covered by the warranty.
Servicing may be free for a short period but will eventually be charged. Repair costs depend on the model and usage
Repair costs can also be low if the car model is reliable and in good condition.
For much older cars one would expect higher repair costs, but these cars are also much cheaper in price
|Loss in Market Value||
Car loses up to 20-30% of its value within a year. For an RM80,000 car, this could mean a loss of RM35,000 within 3 years.
Since the biggest drop in value of a car happens in the first year, the depreciation cost of a secondhand car is much less. But, the exact amount you can expect to save will depend on the price you are paying for the car
|Insurance Premiums||This depends on the value of the car||This depends on the value of the car|