A car is NOT an asset. It is not an investment. It costs money to maintain it and it depreciates anyway in spite of that. But let’s be realistic: it’s very difficult to get around the city or around the country without a car. So should you get a new one or a second-hand car?
For advice on the matter, we turned to two experts in two different fields: Arvin Violante, an experienced bank appraiser, and Paeng (real name withheld), a veteran car enthusiast.
What’s better? Used or brand-new? Both Arvin and Paeng agree that the major factor in making a decision is your budget, but recommend getting a brand new car if possible. “A used car for the first family car is not usually a good idea,” admits Paeng. “You are most likely to encounter many problems with a used car.”
New Car Pros: Zero Defects (supposedly) – A brand new car should be free of problems and as long as it is properly maintained, it should run without trouble for at least five years. If there are immediate problems, these should be covered by the warranty.
Warranty – The usual warranty coverage includes free checkups and free part replacement if the problem is deemed a result of factory defects. If by some gross act of negligence the entire car is one big factory defect, the manufacturer is liable and must replace the entire thing.
Insurance – A brand new car is eligible for the purchase of comprehensive insurance, ensuring it from practically any disaster. Some companies even cover rioting and floods.
Additional perks – Dealers throw in freebies to sweeten the deal (new stereo, alarm system, motion sensors, etc.), especially if the car is paid in few installments or as one lump sum.
New Car Cons: More Expensive – “It’s the amount of money you will be committing to this, whether outright purchase or installment,” states Arvin. “You have to factor this into the amortization of your car and how you can maintain payments, plus interest rates dictated by the economy.”
Car theft – “When it’s new, mainit siya sa mata,” says Arvin. New car models tend to interest carnappers wanting to “share” in the assumed newfound prosperity of their owners.
“New car syndrome” – The tendency for most people is that if they’re driving a new car, they will be slower and more reflexively averse to other cars. This situation can be quite stressful and ironically, contributes to the possibility of having a road accident.
Insurance – Whereas dealers and unscrupulous mechanics prefer to replace parts and saddle you with the costs as opposed to minimal repair work, insurance firms work the opposite way. They will cost-cut, doing minor repairs, only replacing a part when it is no longer possible to fix it.
“A more experienced driver might consider getting a used car,” confides Paeng. “The most important thing to have when you want to purchase a used car is a good mechanic,” says Paeng. “You need a trustworthy mechanic to look over the used car,” agrees Arvin. “He can spot the flaws and defects in the car and help you determine whether you would still want to buy the car at all.”