It’s safe to say that most of us love the intoxicating aroma of a new car and the unforgettable sensation of sitting in a vehicle that has just a few miles on the odometer, but you have to understand that brand new cars aren’t all they’re cracked up to be.
No matter how appealing the financing terms happen to be, purchasing a brand new vehicle is an ostensibly top-heavy transaction that doesn’t make much sense for people on a strict budget, but hundreds of thousands of Australians take this imprudent leap each and every year.
A Statistical Analysis of New Versus Used
Indeed, there are several positive aspects to purchasing a new car.
Fresh-off-the-line vehicles generally come with lengthy manufacturer’s warranties, all of the latest technology, and a sense of steadiness with regard to the maintenance requirements during the first few years of ownership, but it isn’t all sunshine and lollipops when you take a closer look at the economics of bankrolling a new automobile. Shown below is a snapshot of the numbers that you need to know:
- A new automobile will lose approximately 20% of its initial value as soon as you flip the blinker and drive it onto the main road, which means that a $32,000 car will be knocked down to a $25,600 valuation before the ink even has a chance to dry.
- Then, when taking into account the accumulated mileage, standardised depreciation, and inevitable wear and tear in the first year, a brand new vehicle will be worth only two-thirds of its sticker price after 12 months of ownership.
- The three-year mark is also very critical, because the cumulative devaluation is generally 50% after 36 months of moderate usage. If you attempted to sell the car at this juncture, you’d be lucky to recoup half of what you originally paid for it.
- Assuming a median life expectancy of 82 years, the average Australian will own somewhere between 12 and 15 cars during the course of their lives. Following this postulation and the figures mentioned above, experts estimate that you could save roughly $135,000 in your lifetime by sticking exclusively to three-year-old vehicles.
To boot, used automobiles are cheaper to insure and, because they are meaningfully marked down, you can actually take a step up into luxury-class options without overstraining your pocketbook.
Get the Right Guidance and Find the Car of Your Dreams
Over the past 12 months, the sales of used cars in Canberra outpaced new car transactions by a ratio of three to one, which implies that Australians are finally beginning to wise up and exhibit discretion with regard to present day vehicle acquisitions.
Whether you wish to test drive a Ford, Nissan, Lexus, Holden, or Toyota, make sure that you head over to a purveyor of certified pre-owned vehicles–ideally one that facilitates 100-point assessments on every car and offers ironclad mechanical protection plans.
When it comes to purchasing a pre-owned vehicle, slow and steady always wins the proverbial race, so feel free to drag your feet a bit during the shopping process and don’t make a final decision until you conduct trial runs on at least two or three different cars.