Buying a Family Car: Brand-New or Second-Hand?

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.”  

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Used Car Pros
Cheaper – Used cars will always be cheaper than their newer counterparts.

Cost vs. Resale – The resale value of a used car will likely not have that great a difference with the original price if it is kept in good condition - do some repairs, spruce up the paint, wax the body and put tire black on, and you may be able to command a very good price for it.

Used Car Cons
Let the buyer beware – “As is, Where is” is the term used car dealers use. You buy the car that way and you can’t return it because even they may not be aware of the defects (or they know but they don’t care to tell you). Even the most carefully maintained car might have possible hidden defects the previous owner was unaware of. Since there is no warranty for defective part replacement on an old car, you can’t take it back to the manufacturer.  Any defective parts become your problem. “It’s better to buy a used car from a friend or someone you trust as opposed to a used car dealership,” says Paeng. “If this friend cares about his car as much as he does about you, he will take car of his car and give it to you with fewer problems.”

Prone to regular maintenance as opposed to a brand-new car – Older cars tend to break down often because they are old. Also, since the parts that have been changed were replaced at various points of the car’s life, said parts will break at their own time – oftentimes, all at the same time. Hence, you will have to bring the car into the shop more often than a new car. This can be very difficult if you and your family have a demanding schedule.

Little to no insurance aside from TPL (Third Party Liability) – Old cars are harder to insure and their premiums are low.

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Whether you choose to buy a used car or a brand new car, here are some factors you will need to consider:

Safety – It goes without saying that the more safety features a car has, the better. Visit websites such as the National Highway Traffic Safety Administration and Insurance Institute for Highway Safety to see how your prospects fare on safety tests. Steel reinforcement and airbags are a must but be aware that bigger is not always better – usually, vehicles that fail rollover tests tend to be humongous SUVS and pickup trucks.

Reliability - Check Google, ask your friends and do as much research as you can on your possible car with regards to its record durability and dependability. You will need a car that does not break down, no matter what you (or your little ones) do to it. It’s bad enough if you get stranded in the middle of the highway because of some engine problem, but it’s much worse if you have children with you.

Space – The driver’s personal comfort is always a plus, but it’s more important that the back seats are properly configured and are up to standards. We often take it for granted that the rear seats have to have proper seatbelts. Drink holders, back lighting and rear air-conditioning vents are welcome additions (even better if the rear air-conditioner can be controlled from the back, like most light vans and SUVs). The truck space should be able to handle luggage, coolers, strollers, giant teddy bears, longboards, laptops, tricycles and even other kids (even if you don’t carpool, bringing Mikey’s friends home will happen every so often). Fold out seats that grant extra room or extra passengers are a bonus.   

Economy – No matter how good or how safe the car is, it won’t matter if it’s outside the family budget – it has to be affordable. Make sure your car’s spare parts are relatively easy to find at the local talyer, too. Consider your insurance premium also if you're buying a practical no-nonsense car with a good safety record.

Options - These days you can take advantage of possible add-ons such as DVD players, television screens, video game consoles, GPS, remote hatchbacks and tailgates, rear-view camera displays and so much more.

Whatever you decide on buying, a car is only as good as its owner/driver. Proper maintenance, regular check-ups and adhering to traffic safety rules will ensure that you get your money’s worth and enjoy the benefits of having your own family car.

 

Photo from flickr creative commons