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Is the 'new car smell' really worth it? Buying a used car may be a better option in many cases these days. Find out why we think so.
Category: Car Buying Advice
Everyone enjoys the excitement when buying something new, be it something small like a new pair of shoes, or something significant such as a new house.
Understandably, when it comes to a car, many might want to purchase a brand new model, as they are usually perceived to be the more reliable and hassle-free option.
While all cars are depreciating assets, the bulk of depreciation tends to occur in the first few years of ownership. It is often said that a new car can depreciate by as much as 30% in the first year.
This means that by opting for a used car, the first owner would have borne the brunt of depreciation for you. Imagine buying a one-year old car with 30% off its original price. That will surely be an amazing deal!
Value for money
As mentioned above, used cars usually has most of its depreciation absorbed by the first owner, as such they tend to be great value for money in many cases. By opting for a used car, a model that was once out of your budget may now be a possible buy. The only concern most may have is that the maintenance and repairs needed may bring the running costs up. However, most cars are built to last, and typical usage in Singapore tends to be over rather short distances on smooth, paved roads. In fact, a used car can even be as good as new if the previous owner had taken good care of it.
Cheaper to insure
A valid vehicle insurance policy is mandatory for all cars on Singapore roads, and they make up a considerable part of a car's running cost. Unlike new cars, most used car models have been available in the market for some time and, as such, enjoy a higher availability of aftermarket and used parts. The lower costs for parts mean that insurance companies are willing to charge a lower premium. Furthermore, with an older, used car, you can also opt for third-party insurance policies which will bring down the cost considerably.
Less waiting time to get the car
Dealers have limited stocks of cars on hand, if the car you want is out of stock, you might have to wait up to six months or more! When buying a new car in Singapore, you will also have to bid for a COE. Depending on the COE package that you choose, the process of bidding for one can also take up to several months. Used cars on the other hand, are usually parked in the dealer lot, waiting for a new owner. And there is no need to bid for a COE as it already has one. Thus, you can simply pay for the car, get its ownership transferred to you and drive it off on the spot.
Certified pre-owned options
One of the common jitters when it comes to purchasing a used car is the fear of reliability issues and the existing condition of the car.
These days, there are many reputable dealers with certified pre-owned programs whereby the cars for sale are thoroughly checked for issues and fixed before they are sold to buyers. While these might come with slightly higher costs, the peace of mind it offers is surely worthwhile for most.
Some cars are no longer available new
We have all heard of the saying 'old is gold'. While this may not apply to all things, it actually holds true for cars. Many cars of yesteryears are held dearly by enthusiasts.
They can range from iconic Japanese sports cars of the late nineties to classy vintage cars from the sixties. Point being that such cars are no longer available brand new and the only option is to find a used example. When looking for rare or limited edition cars, chances are the second hand market is your only choice if you missed the chance to get one when new.
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