Part 2 of the article delves deeper into the reasons why a pre-owned car is a better choice.
When it comes to the pre-owned or used car trade, Malaysia has many, many used car dealerships in every State. The Capital City and Klang Valley happens to have the highest number of used car dealerships. With a seemingly constant rotation of vehicles at used car dealerships, there are plenty of cars that need new homes. These days, many responsible dealers refurbish and ensure the cars are in good, good condition. Many dealers even offer up to a year’s warranty, depending on model and make. You’re spoilt for choice with so many cars to choose from, however price point is always a key factor as soon as you have your eyes set on one or two.
If you’re still contemplating about a used car or new car, you don’t have to as you know new car options are very limited if your budget is small. On other hand, the used car option could land you something you’d actually like a lot more. The time is now, head to your nearest used car dealership and find a car you really want, instead of settling for something to get by. It’s your money, spend it wisely!
There are more prevalent factors to help you make that wise decision to consider a pre-owned car, for example, depreciation in value, warranty/service matter and real/hidden costs.
Real and Hidden costs
A new car costs a lot more than you think. Most car companies offer unlimited Warranty and throw in free maintenance or service for free, but is it really free?
The main bulk of the hefty cost of a new car is the taxes, but there are other real or hidden costs that the customers may or may not know about. For instance, manufacturers or distributors are required to pay the taxes, whether they like it or not. Bigger companies can subsidize the taxes so taxes don’t trickle down to customers in the form of the cars; gross retail prices. Bigger brands even choose to build cars here to lower taxation, but the quality is far different compared to the imported cars. Next, a customer has to consider maintenance and service, a cost not included in the retail price of a car. Costs are factored in and there are plenty of new car owners who get a shock when they send in for service. A general service for an entry level car could cost as much as RM300 and that’s not including your engine oil and fluids. With free service, labor is generally free but you’re still liable to pay for expensive lubricant and motor oils set by the brand or company. And usually you’re locked down for 5 years; all you have to do is make a simple calculation and you’d realize the total 5-year amount you’d have to pay could burn a real big hole in your wallet or purse.
Now, if you give used cars a shot you might just save a lot more in the long run. Unless you’re buying exotic cars, all you need if you opt for a used car is a trusted workshop or mechanic who would probably do maintenance and services for half or less than the amount you’d have to pay for a new car. This works especially well if you’re putting a lot of mileage in the car and you’d end up saving a lot of ‘mula’. So, a used car might be a very sound decision in terms of affordability and practicality, and you’re not bogged down for 5 years. Now, don’t that sound more like a plan?
Warranty, on the other hand, is useful for new cars, in the event of an accident or when there is a requirement for major parts replacement or parts recall. The parts are replaced for free, no questions asked. Probabilities are rare, but anything is possible on Malaysian roads.
Used cars now also come with warranty although not up to 5 years. If you get a popular model or brand, chances are parts are found everywhere at very competitive prices and it won’t be a cause for concern as far as repair goes, or for your wallet, for that matter.
New car depreciates more in value than used car
This is a fact! A major drawback of a new car is you lose value as soon as you drive it out the lot. A new car depreciates faster than your cash at a flash sale. In fact, it depreciates faster within the first few years of owning the car (even if you're super careful!). Why do some new cars depreciate more? Many factors are valid here; mileage, the brand, reliability, wear and tear, modifications and demand.
On the other hand, a used car depreciates less compared to a new car. Reasons being, the car is already at a bargain when it’s available in a used car lot, depreciation factor isn’t applicable for cars already past its prime and due to the demand factor, some models simply cannot depreciate further as offered prices are at the lowest or bargain. This makes the depreciation rate less of a burden for buyers.
For a true car enthusiast, a used car could be a dream come true. Were you the kind of kid that was always peeking under the hood of your dad's car whenever he was working on it? If you answered yes, you might just fall in love with the process of maintaining your own used car. In fact, those automotive skills could come in handy whenever, wherever.
Furthermore, a used car can prove less of a pain if something bad ever happens on the road. A couple of scratches or a little bump in the corner could be fixed without too much hassle. Now, compare that to a pigeon’s droppings on a new car that just came out of the showroom. If ignored, the stain could cause a defect to the new car’s paintjob or scar the paint. You probably have to spend some cash to get a proper detailing or paint coating with an average of RM2,000, at the least.
Before you make any decision to buy a car, think about the rising living cost in the country and make the right call to buy a car you’d really want. Why settle for less with a new car, if you could have a better pre-owned car?