Should you buy a new or used car?

In South Africa, when it comes to buying a vehicle, one of the most fundamental decisions revolves around choosing between a new or used car. This choice can significantly impact your finances, driving experience, and overall satisfaction with your purchase. Both new and used cars have advantages and disadvantages, making it crucial to assess your unique needs and priorities before making this significant decision.¹

New cars are characterised by their freshness, state-of-the-art features, and pristine condition. Here are some of the critical advantages of opting for a new car:

New vehicles are equipped with the latest automotive technology, enhancing safety, convenience, and the overall driving experience. Many new cars boast innovative computer technology that alerts you to potential obstacles, with some even capable of automatically stopping to prevent collisions. Additionally, you can utilise voice commands for various tasks, such as making calls, sending text messages, and navigation. ¹

Dealerships often provide enticing incentives for new car buyers, such as special discounts and financing deals. These may include cashback offers or other financing deals, making a new car a more affordable option and providing flexibility in payment. ¹

New cars are less likely to experience breakdowns than their used counterparts. Most new cars come with comprehensive factory warranties, typically covering the most common repair costs. Furthermore, many warranties offer free roadside assistance, providing additional peace of mind. ¹

When shopping for a new car, you usually have the freedom to personalise various aspects, including the vehicle’s colour, upholstery, accessories, trim level, and technological features. This customisation allows you to create a vehicle that aligns perfectly with your preferences and needs. ¹

However, there are also some downsides to purchasing a brand-new car:

New cars are generally more expensive than used ones, making them less accessible for motorists on a tight budget. Even if you can afford a new car, you must carefully weigh whether the high cost justifies its advantages. ¹

New cars experience rapid depreciation, with data indicating that they can lose up to 20 percent of their value within the first year of ownership. This can create challenges if you decide to sell the car in the future, as its resale value may not adequately cover your outstanding loan.

The most significant advantage of buying a used car is its lower price than new models. This affordability can help you save thousands of dollars, particularly when purchasing a vehicle that is a few years old. Moreover, most of the depreciation has already occurred, making it easier to sell the car in the future. ¹

Some dealerships offer special deals on certified pre-owned vehicles. These cars are lightly used, reconditioned, and repaired by the dealer. Additionally, many of these vehicles come with a limited warranty that covers certain repairs and maintenance. ¹

However, there are cons to consider when buying a used car:

Used cars may need more specific modern features commonly found in new models. For individuals seeking advanced stereo systems, panoramic sunroofs, or cutting-edge safety features, used cars may not be the most suitable choice. ¹

As vehicles age, they may require more frequent servicing. When purchasing a used car, it’s essential to consider potential additional expenses for maintenance, especially if the vehicle still needs to receive regular upkeep under the previous owner. Costs like new tires, brake pads, rotors, or an oil change may also need to be considered if the car isn’t in optimal condition. ¹

Unlike buying a new car, acquiring a used vehicle can be more time-consuming. You should conduct extra research to find suitable inventory in your area and visit multiple dealerships. Additionally, your desired car may be limited, resulting in a lengthy wait. This process often involves reviewing vehicle history reports, scheduling inspections, and confirming the car’s title, extending the duration. ¹

There is a risk that a vehicle intended to be demolished for scrap due to prior damage has been sold as a used car. Please check the vehicle codes: Rebuilt = Code 3, Spare parts only = Code 3A, and scrap – permanently demolished = Code 4. A free SAIA tool allows you to do a VIN lookup, which could help you. A reputable, well-established used car dealer could also help give you extra peace of mind.³

Your budget plays a crucial role in the decision-making process. If you seek an economical option, buying used might be the preferred choice. However, remember that the actual cost of car ownership extends beyond the initial purchase and includes expenses like maintenance, insurance premiums, taxes, and fuel.

The article aims to provide South African motorists with more information about buying new or used cars. ¹

Are you considering buying car insurance for your future car purchase? If yes, get a quote for affordable car insurance from Prime South Africa, which includes unique benefits like fixed premiums*, reduced excess*, as well as world-class service. Ts and Cs apply.

Please get professional financial advice from a certified financial advisor to ensure you select the appropriate financial services product.