Buy New or Used Car? Pay Cash or Loan?

Looking4Bargians on 06/01/2016 - 14:43

Hi Guys,

Just looking for buy another SUV for Family as upgrade from 4 year old hatchback.

  1. I heard some people saying buying new car is waste of money as you will loose 25% value once drive out of the lot. But how much trust on seller on buying SUVs with not many K's on it.

  2. Having loan on the car will give you financial freedom at certain point but at the end of loan period the actual value of the Car & the amount you paid on loan will hurt you more. The car will not be ours until paid the whole loan amount. Only Driving while paying for drive to the Banks.

So Should i buy New Car or Used (3-4 Years Old so previous owner has eaten up all the deprecation ) and Should i buy on Cash or Loan ?

Poll Options

  • 14
    New Car with Cash
  • 8
    New Car with Loan
  • 164
    Used Car with Cash
  • 4
    Used Car with Loan
Automotive

Comments

  • spackbace on 06/01/2016 - 14:46
    +2

    Some cars don't actually depreciate that greatly from new, but then you have the advantage of full factory warranty, brand new tyres etc etc. Some depreciate greatly within 12 months. All depends.

    As to loan v cash - obviously if you can afford to, cash all the way.

    • Looking4Bargians on 06/01/2016 - 14:50

      But buying old car and replacing tyers and few maintenance won't cost us the same price as new car. For example $40000 new car will sell $20000 in 4 years and replacing tyers and engine replace with other major fixes won't cost more then $25000 and will drive same as new. right ? Only the warranty part is considerable.

      • spackbace on 06/01/2016 - 14:58
        +6

        As I said, all depends entirely.

        New Prado GXL from $63,990 driveaway
        2011 Prado GXL - $40-50k Plus stamp duty ($2k-$3,300) So $42k-$53k drive away

        So in theory that car has cost roughly $20,000 to own over 4 years, in depreciation. Or ~33% of purchase price. But as you say, the person who buys it 4yrs old, doesn't get warranty, and has to rely on how it was driven by the previous owner. Then there's the service requirements etc.

        It's a very individual thing!

        Another example is currently a 2014 VF SV6 Commodore will cost around $32k plus stamp duty, with around 30,000kms on it (ex-rental). I can do a genuine demonstrator model for about $35k drive away.

        • Looking4Bargians on 06/01/2016 - 15:05

          At the min looking for either CX5 or Ix35/Tuscon. Demo can be considered if price is good.

        • SlickMick on 06/01/2016 - 21:22

          is that your example of high depreciation or low? $20,000 seems a lot of money to have a car 4 years newer.

        • spackbace on 06/01/2016 - 21:33

          @SlickMick:

          Low depreciation. The cheapest 2011 Prado on that search has 200,000kms on it. So it's had roughly 33% drop from new, but that's been over a 4yr/200,000km ownership/s. That's a lot of driving!

        • [Deactivated] on 07/01/2016 - 10:13
          +1

          Redbook says 2011 Prado GXL Turbo Diesel Auto is $36200-$40100 private sale, $30300-$34200 trade in.

          I should know, I bought a Prado new for $48k and sold private for $33k after 18 months.
          I wish it had been me buying the $33k 18 month old Prado that only needed a new set of tyres. $34k plus stamp duty, for a car that had less than 30k kms on it and still had 18 months warranty.

        • spackbace on 07/01/2016 - 11:09
          +1

          @RustyStainless:

          Redbook says 2011 Prado GXL Turbo Diesel Auto is $36200-$40100 private sale, $30300-$34200 trade in.

          Redbook is only a tool for the government to monitor stamp duty prices. If you look at my search, you'll see what the market is actually asking for the vehicles listed. I didn't just pluck numbers out of my ass.

          If you sold an 18 month old GXL for $33k, then more fool you. You must've needed a quick sale.

        • [Deactivated] on 07/01/2016 - 13:49
          -4

          @Spackbace: I just had a look on carsales and the first page of 2011 Prado GXL diesels are all under $40k, which is not surprising since that's what Redbook said they would be. Redbook is of course of anyone - personal, industry and government.

          Geez I bet you grab the Redbook when some poor bastard comes in to trade in their 2011 Prado -
          Spacebace: "we can only give you $30K for that.
          Customer: "But I paid $63K for it new..
          Spacebace: "Sorry Sir, but that's the Redbook/Glass pricing… What a fool you were to think it would be worth more…(Boohahahaha)

          Anymore advice that you would like to pull out of your ass today?

        • spackbace on 07/01/2016 - 14:26

          @RustyStainless:

          Redbook never ever gets referenced on trade value, just fyi :)

          Oh and the Carsales search was limited to my state. You can see for yourself on the search how I limited it. My state, 2011 Prado GXL auto diesel. That's all

        • [Deactivated] on 07/01/2016 - 14:27
          -4

          @Spackbace: Yeah right, whatever….

        • spackbace on 07/01/2016 - 14:29

          @RustyStainless:

          Lol stick to being an expert in your job, I'll stick to mine.

        • resisting the urge on 08/01/2016 - 11:26
          -2

          @ozyboy:

          "Just looking for buy another SUV for Family" take a good look at how SUVs crash before you go buying one for the family to ride in… they turn upside down easily, roll easily, swerve badly, wheels come off more easily when they hit kerbs (they are commonly over-bodied and under-mechanicalled).

          Just have a look at how any form of SUV, let alone RV, crashes on all those youtube crash videos. They end up on their sides all the time, or rolling. To be safe, a car needs to handle well in times of emergency.

          Wagons can handle acceptably, some even very well.

          Just sayin' perhaps think safety. ANCAP ratings do not measure likelyhood to roll when swerving at speed, etc.

        • Looking4Bargians on 08/01/2016 - 11:46

          @zerovelocity: Its same for other cars or motorbikes too. Look so many ppl died with Plane crash/ Terrorist attack but still ppl don't stop flying or going crowded places.

          But thanks anyways for showing concern.

        • joinkyn on 08/01/2016 - 17:28

          @ozyboy:

          We got the IX35 SE about 5k off the price plus the years rego and floormats at end of financial year. We also got 4 extra years warranty on it (so 9 yrs all up) for another $800 i think it was. This means we can sell the car with warranty on it for next owner.

          in comparison the CX5 was going to be about 3k more with only a 3 year warranty and less features as not an SE. We found the Demos not to be worth it really. That said, we sold our 5 year old Mazda2 for 60% what i bought it for. Thankfully I had an extended warranty on it, as the ABS unit went at 4 years old. Woulda cost $4000 to fix.

          as for loan vs cash. Depends what you need. We need to establish a fabulous credit rating to bargain with banks on house loan in a few years time. so we got the whole thing on loan, even though we had the cash at hand. we will have paid it off fully in 8 months. If you already have a lot of credit, it might damage your rating, that and you pay interest, but you wont have the money for emergencies. As i said, we are paying ours off rapidly as we are with credit union who doesnt penalise. So you could opt to do half and half? Get the loan for the full amount (slightly lower interest rate) pay half off immediately, then pay rest off at whatever pace you want, and the extra repayment money is withdrawable in an emergency without selling the car

        • [Deactivated] on 09/01/2016 - 03:00

          @Spackbace:

          As a former sales manager and business manager of multiple new and used car dealerships, I can tell you that you're simply wrong if you think redbook isn't used for determining trade in values.

          Trade in value is mainly predicated on wholesale demand in the area, city.region etc but Redbook is 100% used in the majority of evaluations at car yards for trade ins and the sale of cars by dealerships to wholesalers.

          Redbook's main purpose is for the government to calculate stamp duty?
          lol what a crock.

        • spackbace on 09/01/2016 - 10:16

          @murphy84:

          Lol

          I've had enough arguing on this thread, so let me try to keep this brief

          • If your buyer needs to consult a listing of trade-in prices, he must be green to the industry and have zero knowledge of his own
          • We've already ascertained that selling prices vary between states, yet Redbook doesn't narrow it down by state, just a generic Aus-wide thing, yet you think this is still like a bible?
          • Given loads vary between dealerships, what they can sell the car for and what profit they can/want to make varies.
          • My buyer has been doing the job for 15+yrs, never consults Redbook
          • For those playing at home, here's the appraisal process:
            • Look over and test drive car, see what's wrong, what needs fixing, what it will cost
            • Call other dealers specialising in the brand (or wholesale yards which will take your POS), see what they will buy it for. 90% of the time the buyer already has a gut feel. If it's a brand the buyer specialises in, they likely won't even need to call anyone.
            • Check Carsales, see the selling price for similar/newer models. Deduct off internal costs (loads) and what profit they think they can make.

          I've worked with 2 very knowledgeable buyers in this industry, neither have needed to consult Redbook/Glasses.

        • chumlee on 09/01/2016 - 10:26

          You can bargain with banks based on your credit file? I think banks prefer to bargain based on loan size.

        • spackbace on 09/01/2016 - 11:02

          @chumlee:

          ? Who's that in reply to?

        • chumlee on 09/01/2016 - 11:12

          Joinkyn's comment. Must have hit reply on wrong comment. Wasn't aware you could bargain based on credit file.

        • resisting the urge on 11/01/2016 - 14:18

          @ozyboy:
          Really? most of us buy cars with 4 wheels rather than 3, don't fly on airlines that crashed recently (eg. MAL), and void travelling to places suffering bouts of terrorism like they were suffering from the plague; there is still noone going to that beach in Africa where terrorists attacked holiday makers on the beach.

  • boonanza on 06/01/2016 - 15:04
    +2

    There’s an old saying in the business: the biggest car accidents occur on the showroom floor.

    Let’s roll the numbers:

    A brand new 2014 Falcon XR6 would have cost you $35,990.

    Today, one year later, you can pick one up, in very good condition with 15,000 kilometres on the clock, for just $24,250 (a saving of $11,740).

    It will still have two years to go on the manufacturer’s warranty and, just as importantly, fixed price servicing ($270 in the first year and $365 in the second year), which can save you a packet.

    If you then drive the XR6 for another two years, and sell it at the end of the new car warranty, you’ll be able to sell it for $19,600, according to Redbook.

    “Cars lose a massive amount of money in their first year, and then level off for the next couple”, Ross Booth, the global manager of Redbook, tells me.

    So let’s recap: for the past two years you’ve driven around a nearly new car, enjoying the faint whiff of a new car smell and all the latest safety bells and whistles. It’s still covered by the manufacturer’s warranty, and (unlike a second-hand thirsty Merc) the servicing is just $635 for the two years (excluding tyres). So it’s cost you a total of $5,285, or $2,642 a year.

    • JetLi on 06/01/2016 - 15:11
      +5

      I always get worried when someone sells a new car in 12-18 months time, is it a lemon they are trying to get rid off?

      • spackbace on 06/01/2016 - 15:19
        +3

        9 times out of 10 it's an ex-rental and people don't realise or don't care…

        • boonanza on 06/01/2016 - 15:37
          +1

          Where did you get that information from?

        • spackbace on 06/01/2016 - 15:42
          +17

          @boonanza:

          My ass. Plus I'm a car salesman so I see it every day.

          I'd hazard a guess that 90% of the used cars out there that are 12 months old or less are either
          1) Ex-rentals, ex-fleet.
          2) 'Factory demonstrators' - ie the press cars that get flogged, taken on track days, put on dynos for tests.

        • boonanza on 06/01/2016 - 15:44

          @Spackbace:

          Aha so your car salesman well it must be true then:)

        • spackbace on 06/01/2016 - 15:46
          +29

          @boonanza:

          Meh, at least what I say is my own. How about next time you quote your sources:

          https://barefootinvestor.com/how-to-buy-a-near-new-car-at-60…

          There’s an old saying in the business: the biggest car accidents occur on the showroom floor. So this week I worked with Redbook (the leading car info and pricing site in Australia) to come up with a plan that will save you thousands of dollars and ensure you’re always driving around in a car that’s under warranty and is chock-full of the latest gadgets.

          Let’s roll the numbers:

          A brand new 2014 Falcon XR6 would have cost you $35,990.

          Today, one year later, you can pick one up, in very good condition with 15,000 kilometres on the clock, for just $24,250 (a saving of $11,740).

          It will still have two years to go on the manufacturer’s warranty and, just as importantly, fixed price servicing ($270 in the first year and $365 in the second year), which can save you a packet.

          If you then drive the XR6 for another two years, and sell it at the end of the new car warranty, you’ll be able to sell it for $19,600, according to Redbook.

          “Cars lose a massive amount of money in their first year, and then level off for the next couple”, Ross Booth, the global manager of Redbook, tells me.

          So let’s recap: for the past two years you’ve driven around a nearly new car, enjoying the faint whiff of a new car smell and all the latest safety bells and whistles. It’s still covered by the manufacturer’s warranty, and (unlike a second-hand thirsty Merc) the servicing is just $635 for the two years (excluding tyres). So it’s cost you a total of $5,285, or $2,642 a year.

          Like my dad, I understand the pull of a safe family car. The awesome thing is that in 2015 there’s never been a cheaper time to own one.

        • Typical16-bitEnjoyer on 06/01/2016 - 15:48
          +6

          @Spackbace:

          Shots fired!

        • spackbace on 06/01/2016 - 15:58
          +14

          @boonanza:

          What's wrong with quoting facts from someone that is learned.

          You didn't quote anything, you wrote it like you were giving your own advice. There's a difference. And see my next point, there are no 'facts' here, there is just an ad for Redbook.

          I'd say it's dam good advice

          If it was accurate, sure, however I've already proven the figures are wrong.

          unlike a car salesman who is only after a sale and doesn't give a $h!t about the customer once they have made the sale.

          In this case, there is no benefit to me providing advice. Ozyboy isn't even in my state!

        • Typical16-bitEnjoyer on 06/01/2016 - 16:11

          @Spackbace:

          Agreed. Looks just like an ad for Redbook to promote buying new cars. No facts there.

        • Typical16-bitEnjoyer on 06/01/2016 - 16:24
          +5

          @boonanza:
          Have a neg

        • Ughhh on 06/01/2016 - 20:52

          @boonanza:

          Your new phone or TV, clothes, electronics, games depreciate as soon as you leave the store too. You've spent a lot of money on depreciating assets too!

        • SlickMick on 06/01/2016 - 21:33

          @zeggie:
          because the information is incorrect, or because he pointed out a flaw in your statement?? :D

        • spackbace on 06/01/2016 - 21:35
          +6

          @boonanza:

          I think positive

          …

          • Only a moron would think that
          • unlike a car salesman who is only after a sale and doesn't give a $h!t about the customer once they have made the sale.

          Yep, so much positivity.

        • boonanza on 06/01/2016 - 21:37
          -8

          @Ughhh:
          How wrong you are my fury friend. As you know little about me I will fill you in. I am just a machine operator who has full qualifictaions in a completely different industry in a well paid job but due to the Gfc I had to make a complete change about 8 years ago I basically started again after 20 years of working & learnt something new. When I was unemployed for several months I learned that to the best way to save money was not to spend it & when I did have to spend money do it wisely. Since that time I have become what everyone knows as a tight ass which includes shopping at op shops & savers for clothes and I still have my $10 samsung phone from 5 years ago. I have a 15 year old hilux that never misses a beat & costs $20 in fuel a week. But you know the best thing I OWN my house and a few others that people rent and they pay the mortgage for how good is that. I am smart & buy new when it's a bargain & second hand when it's a bigger bargain & I can make money from it not like these fools trying big note themselves.

        • boonanza on 06/01/2016 - 21:41
          -6

          @Spackbace:
          I gave you a postive as well:) Do you need a hug bottom feeder?

        • Ughhh on 06/01/2016 - 21:45
          +5

          @boonanza:

          As you know little about me I will fill you in.

          Just to fill in some gaps - >https://www.ozbargain.com.au/node/220484
          Thats enough there. Don't really care about your life, sorry.

        • boonanza on 06/01/2016 - 21:48
          -3

          @Ughhh:
          It was not for me puggy I love my kids:)

        • Ughhh on 06/01/2016 - 21:49
          +3

          @boonanza:

          You paid for it, your money, your depreciating asset.

        • boonanza on 06/01/2016 - 21:53
          -1

          @Ughhh:

          I think I will manage to make ends meet somehow as hard as you might find it I will be ok….

        • spackbace on 06/01/2016 - 22:07
          +7

          @boonanza:

          Lol I do hope your kids can put together a better argument than you :)

        • boonanza on 06/01/2016 - 22:16
          -1

          @Spackbace:

          I'm not arguing with anyone that's why I'm in control of this conversation and you guys are like a bunch of seagulls fighting over a hot chip. It's more fun than playing the stockmarket:)

        • Typical16-bitEnjoyer on 06/01/2016 - 22:16
          +3

          @boonanza:

          Cool story bro

        • boonanza on 06/01/2016 - 22:22
          -1

          @zeggie:

          Thanx veggie have a positive & hug:)

        • Typical16-bitEnjoyer on 06/01/2016 - 22:32
          +3

          @boonanza:

          Who's a veggie?

          You should really update your $10 Samsung. Your spelling gives a very negative aura. Be more positive!

        • boonanza on 06/01/2016 - 22:40
          -1

          @veggie:

          Don't you dare bag my phone it only has positive vibes, but no veggies. Have another positive sunshine

        • Ughhh on 06/01/2016 - 22:59
          +2

          I'm not arguing with anyone that's why I'm in control of this conversation and you guys are like a bunch of seagulls fighting over a hot chip. It's more fun than playing the stockmarket:)

          What ever floats your boat, believe in whatever you want to keep yourself happy. You're the king of the world woooooooo

        • [Deactivated] on 08/01/2016 - 21:38

          What you've said does change perspective on some things.
          Any idea whats the rule for rental cars. When do they know if its time to call in "ex-rental". Whats the difference between the common big few, budget/thrifty/euro/hertz etc and the other 2nd tier ones like alpha and abel (I don't know if rent-a-bomb is 2nd or third).

        • spackbace on 08/01/2016 - 21:52

          @lolbbq:

          Don't have the 2nd tier ones here so don't know. Typically only get our rental stock from 1 company. They're good value for money for those that wanna save some money :)

        • [Deactivated] on 09/01/2016 - 03:22

          @Spackbace:

          I see. What are the reasons that cause them to update their cars and sell the old ones? Do you think the rental cars have been treated harshly? The proverbial "they" said that "only a rental car has truly been driven".

        • Euphemistic on 09/01/2016 - 07:52

          @lolbbq: lots of drivers treat their own cars like rental cars too, only without the routine servicing!

          Typically if it is a rental people think they have been flogged, but the majority probably are driven by sedate drivers most of the time and cop the occasion al flogging - same way I drive my car.

    • spackbace on 06/01/2016 - 15:15
      +8

      according to Redbook.

      Oh dear

      How about we actually do the research…

      Yep, spot on $25k for a year old, under 20,000kms

      2012 - More like $16k resell

      So over those 2 years, it still cost you $9k to own, or $4.5k/year

      • SlickMick on 06/01/2016 - 21:35
        +1

        that sounds more like what I'd expect to here. I was a bit surprised by that "prices flatten out" statement.

        • spackbace on 06/01/2016 - 21:37

          Yep! And going the other way, if you got a new/demo XR6 for ~$30k (+stamp duty), you'd be doing well and would suffer the same depreciation as a used car :)

        • SlickMick on 06/01/2016 - 21:42

          @Spackbace:
          yeah but that "same depreciation" is more $$$ no longer in my pocket

        • spackbace on 06/01/2016 - 22:05

          @SlickMick:

          How is it more?

          Depreciation would be theoretically the same, purchase price different.

        • SlickMick on 06/01/2016 - 22:10

          @Spackbace:
          $19,600 < $24,250 < $35,990

        • spackbace on 06/01/2016 - 22:12

          @SlickMick:

          Warranty, service requirements, general condition, vehicle accessories.

          All those will differ as your car gets older. No 2 ways around that.

        • SlickMick on 06/01/2016 - 22:20

          @Spackbace:
          I presume what we have here is a car salesman saying "it's worth it" and a non-car salesman saying "save your money" :)

        • spackbace on 06/01/2016 - 22:33

          @SlickMick:

          Pretty much :P

          But that said, I sell new and used so I know both sides. Some of the arguments on here just don't take into account the inclusions you get with a new car :)

        • boonanza on 06/01/2016 - 22:45
          -5

          @Spackbace:

          Where are you in the outback? Most dealerships (Legit) have a new car sales department & used car sales department if you work in both then you probably are the coffee boy for both.

        • spackbace on 06/01/2016 - 22:57
          +2

          @boonanza:

          Another mature reply. You do realise those departments aren't divided by brick walls right? We are allowed to cross-sell

  • nafe on 06/01/2016 - 15:58
    +8

    I bought a secondhand car in August. Here's the numbers for me

    2013 model - new was bought for $37000 in April 2013

    I bought for $22000 in August 2015 with only 17,000kms on it and had 8 months of factory warranty left which can also be extended for another 2 years anytime before the original warranty runs out (it's a manufacturer extension, not some dodgey dealership one).

    Original owner was a chinese uni student who was headed back home and traded it in at a dealer who I bought it from (wish I had bought from the owner as I could have lowballed him and gotten cheaper lol).

    So original owner lost $15000 in 28 months of ownership, approx 40% of the purchase value.

    So if you find the right car, you can save a huge amount of depreciation. One person's loss is another's gain!

    • [Deactivated] on 08/01/2016 - 15:09

      +1 This is the optimal answer. In short find a heavily depreciated car with a few months of warranty left.

      You get the benefits of a second hand car (heavily depreciated = low price) AND the benefits of a new car (low km, near new, and warranty to fix any problems).

    • spaij on 18/01/2016 - 22:19

      Good point. Though one quibble: the new owner would have lost more than $15,000 as they presumably sold it to the dealer for less than the dealer sold it to you for…

      • nafe on 19/01/2016 - 08:40

        Yes this is true, unfortunately, I missed out on trying to buy it from the original owner as it had been listed on Carsales prior to being sold to the dealer! Missed lowball opportunity haha!

    • Ughhh on 19/01/2016 - 12:53
      -1

      If you waited another 5 years, you would've saved 70%, maybe even 80%!

  • jelko on 06/01/2016 - 16:11
    +1

    How long are you planning to keep the car? If it's going to be many years, it would be worth buying new. If you're going to upgrade/flip it in a couple of years then go used.

    • Looking4Bargians on 06/01/2016 - 16:28

      As long as it is working and in good condition which is on avg 5-6 years.

    • SlickMick on 06/01/2016 - 21:38

      I don't understand your logic. What I'm reading is you save ~$20,000 by not buying new, regardless of how long you keep it??

      • BestofOZB on 07/01/2016 - 23:09

        Saving 20k may cost you more than that over 5-10 years if you buy a lemon.

    • BestofOZB on 07/01/2016 - 23:07
      +1

      Finally a logical comment. If you are keeping the car for more than 5 years buy new, reliability is worth paying for depreciation.

  • JetLi on 06/01/2016 - 16:36

    Trying to gauge how many kms would be max if buying used? Say if a used car has done 60,000kms (2012 model), would that be too much even though it has had a full service history and there's nothing wrong mechanically and is in good cosmetic condition. Would it all come down to what price you can get it for?

    • spackbace on 06/01/2016 - 16:41

      Price/Condition/Service History/Which vehicle

      All comes into play (personally). And 20,000kms/yr would be about average.

      • JetLi on 06/01/2016 - 16:51

        Fair enough, so is 60,000kms consider a lot for modern cars? Condition, service history are all good as it's ex Govt fleet. I'm looking at a 2012 ix35 Highlander AWD.

        • Looking4Bargians on 06/01/2016 - 16:53

          is it safe to buy ex Govt Fleet ? i mean are they better than private seller ?

        • JetLi on 06/01/2016 - 16:56

          @ozyboy:

          Not sure, but I personally prefer ex govt fleet as I have more confidence in the servicing history and generally it only does light suburban travel.

        • spackbace on 06/01/2016 - 17:15

          No, it's not a lot at all. Actually seems low kms for a fleet car. Just double check things like what tyres they've put on (cheap and noisy, or not), and the obvious ones for panel repairs.

        • Euphemistic on 06/01/2016 - 21:54
          +1

          @Spackbace: our local govt is now keeping their cars for 120,000km. They use and turn over a lot of cars and have figured out this is a sweet spot for resale value and purchase price/running costs/reliability. They used to turn them over a lot sooner as they purchased sales tax free and when sold at around 40,000km were making a profit on the vehicles. State (or fed) govt closed the loophole so there isn't a profit any more so the kms went up.

          I reckon you should get over 200,000km out of a modern, well built, well serviced car with not too much drama.

        • spackbace on 07/01/2016 - 11:18

          @Euphemistic:

          I reckon you should get over 200,000km out of a modern, well built, well serviced car with not too much drama.

          Entirely agree. Definitely requires a FSH though, and not just some home mechanic changing the oil and filter once a year ;) Maintenance is probably the biggest thing affecting resale, and also what needs to be looked at as priority 1 when buying a secondhand car.

          Surprised with 120,000kms actually, thought they'd kick them off at around 85-90,000, just with timing belts needing replacing (assuming they buy cars with belts, they may choose not to!)

        • Euphemistic on 07/01/2016 - 20:58
          +1

          @Spackbace: pretty funny actually all the guys working there complaining about the cars being worn out at that many km while I'm happily driving a car with 220,000km and thinking it's got plenty of life. They've had it too good over the years.

        • spackbace on 07/01/2016 - 21:00

          @Euphemistic:

          Lol what car you drive?

        • Euphemistic on 07/01/2016 - 21:02
          +2

          @Spackbace: 2003 forester. Did the timing belt change not long after I bought it, replaced a wheel bearing and the rear shocks and springs. Otherwise runs well.

        • spackbace on 07/01/2016 - 21:45
          +2

          @Euphemistic:

          Ah yes the Japanese know how to build a car :)

        • BestofOZB on 07/01/2016 - 23:12

          @ozyboy: generally yes, I bought an ex gov 2007 camry with 250K km on it and did not hesitate, still going strong 2 years later.
          I would be worried about buying an ex gov that is less than 12 months old, somthing must be wrong.

  • Ughhh on 06/01/2016 - 17:12
    +1

    If you're planning to keep the car the for many years, till it dies- then get a new car, providing you can afford it.

    The saying about new cars depreciating once you drive out of the showroom, while yes thats true, but anyone who does not analyse their financial situation prior to purchasing and needs to sell it off in a few months deserves to lose that money as a lesson. Furthermore, that saying can be applied to almost everything you buy - phones, TV, clothes (designer or not) etc, so anyone who has bought those just lost $$$ on a depreciating asset too.

    If you just want the car for a few years, then maybe get a decent secondhand.

    • Looking4Bargians on 06/01/2016 - 17:14

      Not for few years but not for too long till it dies. Roughly on AVG 5 years may be ?

  • tooblue on 06/01/2016 - 17:17
    +2

    Let's change the subject to cash vs. loan.

    From a car salesperson's view, do they prefer customer paying cash or taking up a loan? Why?

    As a customer, if the rate is low than the mortgage rate or return from other investment vehicles, is it better to take up the loan? Say car loan is at 1% and mortgage is 5%, putting the cash in the offset account instead of paying the dealer will save 4%, as long as car is priced same for cash and loan.

    • Looking4Bargians on 06/01/2016 - 17:30

      Yes, i was looking for similar reply. I do have Mortgage with offset. Was thinking same should i keep it in Offset and take up the loan or pay cash and put same amount of monthly internet loan money into offset ?

      Currently IR on Mortgage is %4.6 and Car loan offers are %1.9 ( which doesn't seems right , there must be a catch)

      It seems most of guys agree on buying Used car rather than spending huge amount on New if not planning to keep it till dies.

      • spackbace on 06/01/2016 - 17:35
        +2

        1.9% is generally just because the vehicle has a higher selling price. Some manufacturers still do a cheap price on the car with the lower rate, however that's normally only during sales.

      • raymond y on 06/01/2016 - 20:24
        +1

        At the end of the day. Just work on the interest rate.

        With my dealership, we have a promotional interest rate of 3.99% on any new or demo sold, regardless whether it's sold at or below asking price.

        If you get hit with 5% and have a mortgage of 4.5%, of course it would be better to go off your mortgage. So long as you do it correctly, if you pay it off over 30 years then you are the biggest fool.

        Work out your own schedule to pay the loan amount back in 3/4/5 years and you're better than the higher rated car loan.

        Some people can't control themselves or become complacent and just pay back the minimum required for the re-draw on the mortgage. This is what you need to avoid.

      • BestofOZB on 07/01/2016 - 23:16
        +1

        Get a final price on a loan and then offer cash, you will be surprised how much the price drops. THAT'S the catch. Cheap loan, higher price (less discount).

    • xsacha on 09/01/2016 - 19:21

      Anyone who offers a loan always charges more. Not just cars — the same works for electronics/appliances/etc.
      That's why they always ask you first if you are paying cash or doing a loan. Then if you say cash, they'll say 'I can do a good deal for you' and they promptly drop the price. For appliances, I can usually get them to drop another 20-30% — yes, you have to ask but JB HiFi usually just hand it out on big ticket items.
      If you later say you changed your mind and want to take a loan, they will always tell you this price won't work with the loan. "That's a cash-only price."

      The low interest rate is the deal for loans.

      If you have a home loan, you could always remove cash from your offset (if you have it) to pay for the car in cash. Otherwise just from your savings account. The heavy discount all car dealers give for cash + the opportunity cost of only ~4% interest is definitely the best you can get.

      • spackbace on 09/01/2016 - 19:49

        Sorry, correction, car dealers prefer finance these days as it means the chance for more profit in the deal. While cash means a quicker transaction, finance is where they make the money (and servicing, but we're talking car sales here).

        Gone are the days of 'what's your best price for cash'.

        • xsacha on 09/01/2016 - 23:12

          There is more profit in finance because they sell it for a higher price. These are my findings from talking to car shops asking prices by the way. This is a real observation.

          The finance isn't done by the dealership, they all use external parties like GE Money to handle it so they just get the cash upfront.

          Of course they prefer finance and they always push it too because they actually get paid more with it. As soon as you say finance, the price never decreases much as 1) they lose money on the deal to GE Money to get the lower advertised rate and 2) they know you're willing to pay more when it isn't an upfront payment.

          Regardless of what they prefer though, a real observation (from about a dozen dealerships in my state) is that finance always costs more up front and then you have interest on top of that.

  • negger on 06/01/2016 - 20:28

    Used car from a private seller paying cash. Organise a balance transfer around the time of purchase;)

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