Deciding to upgrade your car is often an exciting time, but it can be rather daunting when you consider all the various decisions you need to make thereafter.

From choosing which make and model you prefer, listing your “must-have” features and of course, setting the all-important budget, getting a new car is not something to be taken lightly.

One of the primary choices you need to make early on is perhaps the catalyst for the rest of your decision-making; that is, will you buy a brand new car or opt for second-hand?

Each has advantages and disadvantages that will impact your budget, the available features and many more factors. The following article examines the various factors to consider when deciding on a new versus used car:

Buying a New Car

There’s no denying that being the first owner of a brand new car would be pretty exciting, especially if you’ve only previously owned used cars.  Whether it’s a hot little hatch, a luxury sedan, a powerful sports car or a huge off-road 4WD, you’ll get to treat yourself to that new-car-smell, the latest technologies, a shiny new paint job and pristine interior, and of course, the bragging rights 😛 While the benefits are many, a new car also means a higher price tag and that nasty little thing called depreciation.


The obvious advantage is that a brand new car is essentially flawless in both appearance and mechanical performance. You don’t have to worry about any sketchy history or previous owners, whether there is finance owing on the vehicle and you get to 100% enjoy the perks of being the first owner! Not only is the car immaculate, but you will also get the manufacturer’s warranty for a set amount of years or kilometres; this amount can vary depending on the dealership and the manufacturer, 3 – 7 years warranty and up to 100,000 km is what you’ll find at most dealers. If you decide to sell the vehicle before this warranty is up, then you can pass it on to the next owner as an extra selling point.

A new car also has the benefit of lower running costs, such as ongoing maintenance and servicing, better fuel economy, the latest safety features and all the bells and whistles that are more common in newer cars, from internet connectivity to multiple USB ports and much more.

Opting for a brand new car from the dealer also gives you more variety to choose from. You can select from the wider range of brands, makes, colours, specifications and features. That means you can the exact car that you want, as long as the price is within your budget. The dealer may also suggest a number of extras, but it pays to know which ones you should avoid to save on the total cost.


Speaking of cost, this is where the disadvantages of buying a new car comes in. Brand new cars are more expensive, and the more high-technology features the car includes, the higher the price gets. It doesn’t end there. There’s also depreciation.

What exactly is depreciation? It’s where a tangible asset loses it’s value over time, and its especially relevant to cars. A new vehicle will lose 20% of its market value the minute you drive out of the dealership. After three years, it will lose 10% more of its original value. That’s how fast depreciation works. So, for example, you bought a new car amounting to $50,000. Three years later, the car’s market value will go down $35,000. The $15,000 difference is the cost of depreciation.

For most car owners, the amount of money lost due to depreciation isn’t apparent until they decide to sell their car. Although some vehicles can hold their value (we’re talking classics and rarer vehicles), most cars are affected by depreciation. For those of you who are financially conscious, depreciation is something that you should carefully factor in to your decision.

Buying a Used Car

There is a stigma attached to buying a used car that can cause some people to shy away from what could be a more financially-sound option. When we hear the term “used car”,  mechanical trouble immediately pops into mind. However this perception is outdated as today’s cars are much more dependable, even if they are a few years old. With regular maintenance and care, some cars can run for over 100,000 kilometres before needing any major repairs.


The primary advantage of buying a second hand vehicle is the cost. It’s considerably cheaper compared to the cost of a new car. Going back to our example of a $50,000 brand new car; if you choose instead to buy a near-new used version of the same car that is just over a year old, you can get it for just $40,000. That’s a $10,000 saving. On the other hand, buying a 3-year-old used version of the same car will save you $15,000 and it will likely still be in excellent condition (depending on the previous owner’s of course).

Purchasing a used car will also save you from losing out too much from depreciation. If you purchase a used car for $35,000, you can sell it in three years for $25,000. That means you’ll only lose $10,000 on depreciation.

Some other advantages of buying a used car are the lower insurance and vehicle registration costs. The cost of insurance will also depend on your age and driving history, however a vehicle with a lower market value attracts a lower premium, even for comprehensive cover.

The savings you receive from buying a used car can make it easier for you to afford other running costs such as fuel, regular servicing and repairs, or perhaps even some cosmetic add-ons like new speakers, tinted windows or plush car seat covers.


Although quality and performance are no longer a major issue, there are still a few drawbacks that come with buying a used car. One of which is the lack of or limited warranty. Whether you buy a used car in a dealership or from a private seller, it’s likely that the cost of repairs will come out of your pocket.

In addition to this, getting a second hand car that’s over 10 years old or has a high kilometre count still carries some risk; you want to make sure that the car is mechanically sound, and doesn’t have any pre-existing problems. If you do find a vehicle that you’re interested in, no matter how old (or new) it is, it’s advisable to get the vehicle inspected by a professional just to be safe.

And while there is an abundance of second hand cars for sale around Australia, you may struggle to find the exact model that you want locally. It may require some travel (and thus an additional cost), or for you to choose something other than your preferred car.

In saying that, you might find the perfect car at a great price, but a closer inspection shows more dings and scratches than you would have liked, stains in the interior or

Buying a used car will also require you to put in the long yards doing the proper research. You have to make sure that what you’ll be paying for is exactly what you will get. To do this, you need to know what to look for during your physical check-up of the used car and researching beforehand is your best course. You also have to check for any outstanding debt or charges against the vehicle. Check the Personal Properties Securities Register (PPSR) to make sure that you can buy a used car with confidence.

Financing Your Car

Once you weigh up your options, at the end of the day you should buy according to needs and your means.

Ask yourself, “What do I need the car for?”. Then, accordingly, research and list possible car models that will fit your requirements.

The next step is to figure out your finances. Do you have any savings? Do you have secure employment that can support your purchase? Do you have existing debt? How much money can you shell out every month for the car? Once you have answered these questions, you can set yourself a budget. Compare it to the list of cars that fit your needs, and then narrow down the list to those that suit your budget, whether that’s for a new or used car.

The next step is to arrange your financing. Going through a broker like Aussie Car Loans means you’ll have access to a wide range of lenders to get you the lowest possible interest rates. Our consultants will find you an affordable car finance package that is tailored to your budget and needs.

Call Aussie Car Loans at 1300 889 669 or apply online today!