Buying Car New or Used?

LFabio08 on 29/09/2022 - 16:17
Last edited 29/09/2022 - 16:30 by 1 other user

I know this topic has been covered to death over the last 18 months, however they question of old versus new always seems to be based around people looking at near new cars, as opposed to 5-6 year old cars.

My question is in relation to the used car market for 5-7 year old vehicles with low KM's, regularly serviced that are 30-40% cheaper than the equivalent 2022 model of the vehicle.

My wife and I are currently in the market for a new car, however we are not in a rush. We will in the next 12 months need to look at upgrading as we need a larger vehicle with kids on the way, etc. While I can afford a new car with a warranty, the OzBargainer in me doesn't necessarily want to drop $45-$50K on a new car when I can find an alternative in good condition, for say $30K. We should get circa $22K for my wife's current car, meaning we are only out of pocket $8K and can keep the additional money in our offset.

What is everyone's views on this at the moment? Everyone seems to be saying 'buy new' anytime someone asks this question, but the price difference of $20K today makes it such a difficult decision.

Automotive

Comments

  • Brucet on 29/09/2022 - 16:34
    +1

    If you can afford get new car then.

    • Fabio08 on 29/09/2022 - 17:00
      +2

      Define afford though? I have a mortgage, so I'd be taking money out of my offset to pay for it which just feels like I'd be losing momentum. Was instead hoping to head down the path of a reliable Mazda or Toyota, save the $15K - $20K and get on with it.

      • barge-in hunter on 29/09/2022 - 19:49
        +7

        Unsure why you got downvotes - I feel the same way.

        For me, there are a few factors:
        1) safety (for those new kids) - would a second hand car have things like AEB and other crash prevention tech? Nothing like 5 hours sleep a night to increase your accident risk

        2) can I afford it = mortgage impact - how many years/months will be added to your mortgage by spending the extra? In the months - then I’d get new. In the multiple years then forget that

        3) need vs want - be brutally honest with yourselves and ask “do I need (for example) a $50k suv just because kids?”. Plenty of people survive parenthood with smaller to mid sedans and hatches

        • Fabio08 on 29/09/2022 - 20:03

          Thanks for your response. Our joint salaries suggests we can afford a nice car, but we have had a lot of expenses recently with more to come once kids arrive.

          The need for a bigger car is partly future proofing for kids, and partly due to my wife’s line of work. She has a small Rio at the moment and can’t fit into the trunk what she needs to.

          • barge-in hunter on 30/09/2022 - 07:42

            @Fabio08: Understand- kids are expensive, and parental leave sure doesn’t help… but in the question of “can I afford to redraw from my home loan for this”, having a healthy salary is only one ingredient. I’m not asking you to disclose how much your mortgage is but it’s very important to the equation - hence the focus on increased duration of the loan

            A small Rio is doable with one child but it’ll have its limits for sure. What’s the other car though? You only really need one bigger car out of the two though, hence the tough question.

    • BewareOfThe Dog on 29/09/2022 - 21:32

      Or Demo, if you are lucky enough to track one down.

      • reactor-au on 30/09/2022 - 07:44
        +2

        Will cost same as new in the current market

  • Brucet on 29/09/2022 - 16:35

    quality and reliable ( go for toyota).

    • boomramada on 29/09/2022 - 16:40

      how much more than any other Japanese car or maybe Korean cars?

  • AndyC1 on 29/09/2022 - 16:36
    +4

    If you can wait for the car delivery then get new.

  • wordplay on 29/09/2022 - 16:37
    +7

    really depends on the make and model. there were still people selling second hand cars for more than new car prices 6 months ago. I've stopped looking as we ended up buying a brand new car as the second hand market was silly (even for 5 year old cars)

  • Jimothy Wongingtons on 29/09/2022 - 16:45
    +2

    Brand new for that Instagram appeal mate

    • Fabio08 on 29/09/2022 - 16:57

      Seems that way!

  • ady211 on 29/09/2022 - 16:46
    +2

    Same position as well people have different expectations on 2nd hand cars while selling. Sometime it's better to go for demo or 1 year old if you want a bit of peace of mind

    • Fabio08 on 29/09/2022 - 17:00

      What are you leaning towards?

      • ady211 on 29/09/2022 - 17:12

        I have got some novated lease costs, I am after CX-9. I am leaning towards between 1-3 year old but very hard to get to be honest. New one is 53k, 3 year old is 46-47k but 1-2 so not much choice.

        • Fabio08 on 29/09/2022 - 17:14

          I am in a very similar position! Except 5 years old is circa $20K less, which is where it gets hard.

        • pao2x on 29/09/2022 - 19:15

          6k depreciation in 3 yrs for a 53k vehicle? Thats a terrible price. In linear depreciation it would take 26 years to fully depreciate that. And it's certainly not linear…..

  • [Deactivated] on 29/09/2022 - 17:11
    +2

    if you can afford it, buy new.

    you never know how a used car has been treated, how it was maintained, what parts are about to go on it, and the warranty is either gone or almost gone (5 - 7 years)

    a new car is futureproofing (with some caveats, depending on manufacturer and model).

    the used car market is pretty bad at the moment, it's a sellers market, not a buyers, so you'll be overpaying if you go that route.

    • Fabio08 on 29/09/2022 - 17:12

      The few I was looking at were in pristine condition, serviced by the dealer and very low kilometres.

      • [Deactivated] on 29/09/2022 - 17:13
        +2

        i can only tell you what i'd do, but i'd go new, if you are happy with what you looked at, you should buy it

      • ady211 on 29/09/2022 - 17:13

        I am of the opinion buy a car which has at least 2 year warranty left so for something like Kia you can go for 5 year old but Mazda 3-4 max. But this is my view.

        • Fabio08 on 29/09/2022 - 17:15

          Do you then keep it when it's out of warranty?

          • ady211 on 29/09/2022 - 17:29

            @Fabio08: yes but by then at least you know no major issues with the car

            • Fabio08 on 29/09/2022 - 17:49
              +1

              @ady211: Fair call. I was considering this with a Hyundai Tucson but with only 1 year warranty remaining, figured I’d still be in a similar position.

  • Drakesy on 29/09/2022 - 17:20
    -1

    Second hand if they car you want requires you to finance it.

    I'm firmly of the opinion that your car's value should not be more than 20% of your yearly income.

    • Mokr on 29/09/2022 - 19:35
      +1

      It depends got to factor running costs. Longevity

  • JIMB0 on 29/09/2022 - 17:21

    That's a lot of money for a Camry

  • brendanm on 29/09/2022 - 17:21
    +2

    Used, why pay more.

  • Euphemistic on 29/09/2022 - 17:39
    +3

    Used, near new every time. IMO a 2-3yo car is near enough to new and any car should be good for 10years and 200,000km.

    Also, at this point don’t go spending extra you don’t need to on a new car. Save that extra and jump into an EV sooner.

    Yes, in this market the prices are silly for near new cars, but if there is enough price difference between the model you want and a new one, get used.

    Only reason to purchase newer is if you have available funds AND the new model has something you ‘just want’ that the use version doesn’t.

    • Fabio08 on 29/09/2022 - 17:46

      To be honest, this is where my head was at. We recently purchased a house and are trying to chip away at the mortgage with the view of renovating in the next 2 or 3 years. Saving $15k-$20k on the cost of a new vehicle just seemed to make sense, provided the car was in good condition.

      Everyone keeps saying buy new, and our last 2 cars have been new, however I feel that even new car prices are increasing.

      • Euphemistic on 29/09/2022 - 20:29

        Which begs the question can you hold out with your current ride for another 2-3years while EVs gain traction?

        • Fabio08 on 29/09/2022 - 20:35

          Probably not, it’s already not a great outcome for my wife, with kids on the horizon. We both drive small cars, so probably need to upgrade one. Also the place we have purchased does not have a garage so charging wouldn’t be easy!

  • SnowDragon on 29/09/2022 - 17:59

    You say "Everyone seems to be saying 'buy new'" but who is everyone?

    Every OzBargainer earns 300k and drives high yield cars.

    • Fabio08 on 29/09/2022 - 18:02

      Sorry, I’m generalising. That just seems to be the common answer on all of these posts.

      • Euphemistic on 29/09/2022 - 20:37
        +3

        Until covid supply chain issues, the majority of posters here would probably have said buy 1-3 years old and save the depreciation. For now, used prices are high and close enough to new prices you’d be mad not to buy new - if you can actually find something in stock.

        For now you need to aim older to get the savings, which knocks out a lot of models with the latest safety stuff like AEB and one keeper etc. Before these camera/radar systems the safety improvement wasn’t as significant for quite a few years. That is, before these systems ABS and airbags were common and pretty much all you needed.

        • Fabio08 on 29/09/2022 - 20:39

          Yeah, fully agree. I grew up always being told never to buy a new car; how times have changed! I’m thinking if I can minimise the difference to $7-$8K between my wife’s current car and a newer car, it’s not a bad outcome.

  • Mokr on 29/09/2022 - 18:11
    +2

    It's way too hard to know how the market will be next year.

    It could go up. Or down.

    Btw if new get a plug in ev.

  • [Deactivated] on 29/09/2022 - 20:24

    Does your wife want a new car or a used car?

    • Fabio08 on 29/09/2022 - 20:31

      Probably a new car, but who doesn’t?

      • [Deactivated] on 29/09/2022 - 20:31

        Probably? Have you asked her?

        • Fabio08 on 29/09/2022 - 20:32
          +3

          Nah, we don’t speak.

          • [Deactivated] on 29/09/2022 - 20:35

            @Fabio08:

            We will in the next 12 months need to look at upgrading as we need a larger vehicle with kids on the way, etc

            Oh - that's not good with twins on the way. Wishing you well with your relationship in the future.

            • Fabio08 on 29/09/2022 - 20:37

              @[Deactivated]: Thanks, and cheers for the advice. I’ll see if I can spark a conversation with her next week; will be weird asking her for an opinion.

              • [Deactivated] on 29/09/2022 - 20:38
                +2

                @Fabio08: You can do it, Fabio!

                • BewareOfThe Dog on 29/09/2022 - 21:35
                  +1

                  @[Deactivated]: Member since 2018, and it's his 1st Post.

                  All your bros (and sisters), are gunning for you! ;)

                  Best of luck with your decision.

                  • [Deactivated] on 29/09/2022 - 21:43

                    @BewareOfThe Dog:

                    Member since 2018, and it's his 1st Post.

                    And

                    I know this topic has been covered to death over the last 18 months

                    Yet they still persisted with the done-to-death post :(

                    Perhaps OP will have an original topic for his 2nd post?

                    • BewareOfThe Dog on 29/09/2022 - 21:46

                      @[Deactivated]: Maybe OP is shy?

                      Us Ozbr's can be a bit harsh at times.

                      • [Deactivated] on 29/09/2022 - 21:55

                        @BewareOfThe Dog: Seems like OP has relationship issues so perhaps not in the right headspace to be original this evening.

                        Harsh? Ozbargainers? Say it isn't so!

                        • BewareOfThe Dog on 29/09/2022 - 21:59
                          +1

                          @[Deactivated]: I've been in the penalty box a few times….;)

                          Yes, I agree, and been less aggressive.

                          • [Deactivated] on 29/09/2022 - 22:02

                            @BewareOfThe Dog: It seems very much a buddy community, friends and mates abound!

                            • BewareOfThe Dog on 29/09/2022 - 22:04

                              @[Deactivated]: I try not to slam electrical items etc, as that will shorten their life.
                              Hence why I recently bought a Breville silent-close Microwave, despite being 2 to 3 times more than what I was replacing.

                              • [Deactivated] on 29/09/2022 - 23:21

                                @BewareOfThe Dog: Silence is golden and yes, you have to pay more for it but I won't tell you to hand in your OzB membership card because that's repeated far too often on here ;)

                        • Fabio08 on 29/09/2022 - 22:06

                          @[Deactivated]: Couldn't be further from the truth, but if that makes you feel better about yourself then so be it.

                    • Fabio08 on 29/09/2022 - 22:05

                      @[Deactivated]: I am so confused, what is your problem? You tried to have a dig at me with one angle and when that failed, you have now tried another angle. Go and get a life, you'll be happier for it.

          • BewareOfThe Dog on 29/09/2022 - 21:33

            @Fabio08: Nah, we don’t speak.

            SMS, Messenger?
            You don't want to come with the wrong colour. :)

            • Fabio08 on 29/09/2022 - 21:39

              @BewareOfThe Dog: I’ll send her an email tonight and see what she says. If she hasn’t responded by the morning I’ll just get on with it.

              • BewareOfThe Dog on 29/09/2022 - 21:41
                +1

                @Fabio08: We'e here for you. Feel free to do a poll on what you find.
                Just remember salespeople are full of $h1t, and will tell you 'I just had a new couple looking at this. Take it for a test drive in case they come back in the next hour'.
                But yes, test drive where possible, but every car, especially new will feel great. :)

  • bargaino on 29/09/2022 - 21:22

    for 5-7 year old vehicles with low KM's, regularly serviced that are 30-40% cheaper than the equivalent 2022 model

    Wow! The market has changed. That does not sound like a great deal. I would have expected 50% depreciation in a few years.
    What is the price for a 1-yo model?

    • Fabio08 on 29/09/2022 - 21:42

      Probably around the $50k mark. About $20k cheaper is the range I’m looking at; just can’t bring myself to spend more.

      • bargaino on 29/09/2022 - 21:45
        +1

        My approach has been to look a bit older, and get a car in exceptionally good condition for its age.
        It takes a bit longer to find, and you do miss out on the latest tech, but worth it IMHO.

        • Fabio08 on 29/09/2022 - 21:47

          Slightly older as in 5 year old, or 10 years old? That was always the advice my Dad gave me as well, something with low mileage that was well looked after. My current Corolla was the first car I purchased new.

          • bargaino on 29/09/2022 - 23:14

            @Fabio08: It depends on what sort of vehicle, but yes, in that 5-10 year range.

          • Euphemistic on 30/09/2022 - 06:34
            +1

            @Fabio08: IMO 5yo is still pretty new. Once you get to 10yo you’ll be more likely to get issues, plus is more likely to be 2-3 generations older. 5yo might still be the current shape, albeit with less features.

  • BewareOfThe Dog on 29/09/2022 - 21:57

    Also, what makes you think you will get 22k for your current vehicle. If a similar vehicle is 22k on the Used car lot, they will trade for 10-14k, depending on condition, service history, kms etc.
    Carsales said my Toyota was worth 7k. I had it at 4 to 5k, and ended up selling it for 3k (it only had 2 days rego left, and I didn't want to may for more rego, pink slip, green slip and whatever the mechanic said needed doing)

    Selling second hand, you may get this thru carsales, FB marketplace, but remember there are heaps of scammers are out there. Get an inspection done, but just have a scroll through Ozbargain for hint's, tips etc before posting.
    Try and buy a demo (like I did). It was a 40k Premium I30, that I paid 32k for. 800kms on the Odometer.
    Best of luck with your decision, and just remember this :)

    • Fabio08 on 29/09/2022 - 21:58

      It's a 3 year old car, single owner, meticulously looked after and most are listed for circa $24K on Carsales.

      • BewareOfThe Dog on 29/09/2022 - 22:00

        Cool. Just remember listed and what you sell it for will be different, but in this current car market, hopefully you get 22k for it.

        Depending on how much rego you have left (and state laws etc), you can probably stick to your price for a bit. ;)

        • Fabio08 on 29/09/2022 - 22:07

          Whether I get $22K or $20K really doesn't make much of a difference. I just listed what I thought was a sensible price, but appreciate the advice none the less.

  • Kelpei on 29/09/2022 - 23:44
    +1

    People offload their cars for a variety of reasons, some genuine and some not so genuine. You have to go over every detail of the car and its history with a fine tooth comb. I've been through many private car sales, some people are honest and tell you that their vehicle was previously a write off that had been repaired and re-registered. Most don't tell. I've bought a low Km Corolla with transmission problems that I didn't know about until a few days later. Not a word from the previous owner about it. Some people sell their car because they are genuinely relocating interstate or overseas. Some people simply want to upgrade because they have the money, even though there is nothing wrong with their car. The used car market is full of landmines and if you are very unlucky you could buy a brand new car that could turn out to be a lemon.

  • spackbace on 30/09/2022 - 00:58
    +1

    This comes down to what you choose to prioritise:

    1. Safety features - does the car have auto braking, radar cruise, etc? Do you care?

    2. Technology - Apple carplay/Android auto is very handy and will shit all over the factory system, does it have it? Do you care?

    3. Servicing - you're now out of capped priced servicing programs, how expensive is it? Do you care?

    4. Warranty - close to expiring, do you see the car having issues? Do you care?

    Also add stamp duty to the equation, plus maybe new tyres/brakes etc. The car will also have its own dents/scratches, panel repair, dirt to the interior

    At the end of the day, only you and your family can decide where your money is best spent

    (this is from someone who's looking to buy a ~10yo imported car for $20-25k vs a local near new car for ~$50k… Priorities)

    • Fabio08 on 30/09/2022 - 06:41

      Thank you for the advice and all thinks to consider. The cars we are looking at tend of have a lot of the features you have listed but regardless, we will need to consider what is important to us. Good to hear someone else is considering second hand and not looking at new.

  • Rob-4x4 on 30/09/2022 - 07:58
    +3

    Try a car broker buying something at dealer auction for you.

    Look for vehicles still under warranty to mitigate the risk …

    Last time I did this I got investigated by the stamp duty people as the price I paid was over $10K under the current going retail prices at stealerships even after broker fees etc I paid …

    • cbice95 on 30/09/2022 - 17:26

      Hi mate great tip, out of curiosity how did they investigate you/what did they do?

  • Waltervp on 30/09/2022 - 09:41

    Safety Features is the big thing. For the family i would definitely tick all the midden safety features in any vehicle id buy, but i WorldCom buy new. I've heard too many people who've had major repairs and inconveniences on new cars despite careful treatment, expensive services… at least when you buy a car with 100k+ you know all the lemons have been identified and faults and weaknesses addressed. Do check service records etc. but i would not buy new. Get a 3-5 year old one with 100k clicks or thereabouts and ensure you get the top of the line model worth all the modern safety features. The Ford Mondeo Titanium fits my bill for safety, space, price and economy. There is bound to be a vehicle for you second hand and safe yourself $20k minimum.

    • Fabio08 on 30/09/2022 - 10:33

      I really appreciate this response, thank you.

  • 82norm on 30/09/2022 - 10:46

    There are good new cars circa $35-42k if you don’t won’t to stretch to $50k without feeling guilty. Gotta be able to sleep at night.

    • Fabio08 on 30/09/2022 - 10:52

      What type are you thinking? I was considering a Seltos but think we may outgrow it quickly.

      • Euphemistic on 30/09/2022 - 17:56
        +1

        Most compact SUVs are no bigger than their hatchback cousins the SUVs tend to have a tall skinny bootspace too, not great for prams

        We had a 2nd gen RAV4 (probably similar to selfish size now) and really struggled with 2 kids and holiday gear. Even shopping ended up with it piled up rather than spread out.

  • 82norm on 30/09/2022 - 10:53
    +1

    SUBARU XV.

    • spackbace on 30/09/2022 - 18:15
      +2

      Certainly not for a growing family. It's just a jacked up Impreza

  • Campbellske on 11/10/2022 - 17:40

    Second hand. Less depreciation and learn to fix basic things and service yourself. Skills and tools you learn will pay off in other ways too

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