Used or New. Which one is better for you?
This will be dictated by a number of factors, chief among which is how warm your pockets are. It’s fair to assume that anyone with the financial means would choose to buy a zero mileage car every single time. That however is what is wrong with assumptions because many people, me included, even if armed with the fattest bank account in the country, would prefer to buy a used car over a new one. If you don’t have the money to buy a new car, buying a used well maintained car is a viable alternative.
The majority of vehicles on Kenyan roads are, despite bearing the latest number plates, hand me downs from the Japanese domestic market. Brand new cars sold in Kenya account for less than 20 per cent of new registrations each year. Majority of these are commercial vehicles like lorries and pickups, which are justified by the return on investment. New vehicles for personal use accounted for less than 5 per cent of total annual sales this year and every year.
Each option, whether to buy new or used, has its accompanying advantages, let’s look at some of each below;
Advantages of buying used
- It’s like Recycling. – There are already too many cars in the world. Current yearly output is 4 million cars. For every car to be made some men have to go down a mine, follow decades old techniques to extract materials that are then shipped around the world and processed into a car. While the latest cars come bearing the latest technology to improve efficiency and safety, they don’t replace the one’s already existing, rather they only add to the congestion. Buying a used car on the other hand means that you are not adding to the cars on the road
- Depreciation – But for a few exceptions, cars depreciate like a falling rock. A new car can lose up to 50% of its value simply by being driven out of the showroom. The simple fact is that nobody who can afford to buy a new car will pay anything close to the floor price. When you buy a used car, the first owner has already taken the hit. When you buy the car, it will have reached terminal depreciation, or be very close to it, keeping its value for longer and sometimes people have been known to resell later at a profit.
- Buying a used car means it has been proven. It’s safe to say that nothing made by man will ever be perfectly perfect. Cars especially are prone to after sales corrections. This is done by the car companies using something called a TSB – Technical Service Bulletin. When a company issues a TSB, it is usually a solution to a problem experienced by the initial buyers of a car. Sometimes the fault is much more serious, requiring a need for a recall. When a recall happens, the car is taken back to the authorised dealer and fixed, ideally you should be given a courtesy car but good luck with that in these here parts.
- It’s more personal – Consider a new saloon car, priced at about 4 million shillings. You can have it in any colour, choose your fabrics and the wheels and anything else you want the dealer will gracefully oblige. After all you are paying a prince’s sum for every little thing. Optional extras will see the said saloon car quickly get closer to 5 million shillings. Alternatively, you could get an older car, maybe at 1.5 million, get all the aftermarket tid bits you want and even a fresh coat of paint and it will still be cheaper but more importantly you will not be limited by the dealer’s brochure choices.
- You don’t actually need a new car. Car companies will encourage you to buy the latest car; a typical life cycle of a new model is about 7 years. Through that time there will be many variants with different performance characteristics and aesthetic upgrades that make you desire 2018 models to the 2016 models. But guess what, there really isn’t much difference even if you were to go back 10 years. A brand new Mercedes will be imperceptibly more comfortable than one made 5 years ago because Mercedes have always made very comfortable cars. They have always had the latest tech to a point that the 5 year old Mercedes E Class, if well optioned, will have technology that a brand new Toyota is only getting in 2017. Scroll through the used car market and you could end up with a whole lot of car for very little coin.
Advantages of Buying New
- You’re the first; there’s just something special about being the first person to use something. Be it a house, a car or even just a suit, being the first to own something new means that you have the satisfaction of knowing that the car has never been in an accident, never been driven aggressively or been fitted with knock off parts. It’s like meeting a new lover who has never been with someone else before, they don’t come with baggage from their previous relationships and in a sense you’re starting off with clean slate, same idea with the car.
- Technology: car companies are constantly innovating to stay ahead of the competition. This means every new model is safer, faster, more fuel efficient and in almost every way better than the previous model. A base model city car will now come with Bluetooth connectivity, handsfree calling and ABS brakes but to mention a few. Modern cars are also much lighter making them more enjoyable to drive even with a laughably small engine.
- Warranty: having a warranty gives you peace of mind. New car dealers will go out if their way to sweeten the deal and lock you into the brand, to do this they will make sure to give you the best possible experience with your car, lest you go bad mouthing the brand. There is also the added advantage that the service is carried out by company trained mechanics using original spares. The only alternative for used car buyers is a mechanic recommended by a friend and a prayer that the spares are at least 70 per cent genuine. There simply is no comparison.
- Leg Work: To buy a new car is straight forward, walk into the dealership, choose the model and specification and then pay. Easy peasy. Buying a used car in contrast is week after week of deliberation, visiting numerous car yards with a cloud of uncertainty hovering above your head all the time. Even after the deal is done, the first few weeks will be spent hoping that you didn’t fall for a scam, that the car documents are clean and the vehicle will not grind to a halt from some hidden fault. Buying new is just easier, faster and less stressful.
- Financing: Banks will generally have better loan rates if the car is new. New cars are easier to value as they have not been hit by depreciation. Depending on the model rates may actually be competitive enough that the monthly premiums are more comfortable a choice than paying a lump sum for a used car.