Benefits (financial) of buying a pre-loved car in malaysia

Old is still gold! Here are some reasons why buying a pre-loved car is definitely better than a new car.

 

YOU’RE ONLY PAYING A FRACTION OF THE PRICE

Buying a new car is definitely more expensive than buying a used car. Most of financial institutions also require down payments of at least 10 percent on a new car loan.

For an instance, 2019 Honda Jazz will cost you around RM70,000 to RM88,000 in total, while you can opt for the same model, (2015) Honda Jazz for RM58,000.

So, when you are buying a used car, you will save more by paying a fraction from the market price of your preferred car.

 

 

 

INSURANCE IS CHEAPER. YOUR WALLET BLEEDS LESS MONTHLY

When a vehicle is older (worth less), it will cost you less to insure it when you’re buying a comprehensive coverage. The insurance rates will also be affected by the age of the car.

For example, for Perodua Myvi 1.5 SE (2019), you have to pay around RM1300 (estimated price) for the first year of its renewal, while you can pay less about RM700 for car insurance renewal when you are buying the same model of Perodua Myvi SE 1.5 (2014).

 

 

 

YOU GET TO CHOOSE THE CAR YOU WANT ESPECIALLY IF IT’S NO LONGER IN PRODUCTION

Buying a used car, as opposed to a new car, will provide you with selection of inventory to choose from. You are not limited to models that were released over the past year or two as you would be when buying a new.

For an example, you can still drive a used Perodua Viva when pre-loved car is what you want, despite Perodua has stopped its production.

 

 

 

YOU DON’T END UP GO TO WORK TO PAY FOR A CAR 

Most of us end up using a huge portion of our salary for a car. We have that covered (link). In addition, getting a used car might be great way of saving that extra penny on your first pay cheque! After all, a good used car does get you from point A to point B. To top it up, you can definitely reduce your list of monthly commitments by getting a pre-loved cat at a steal!

 

THE VALUE OF A PRE-OWNED CAR DOESN’T DEPRECIATE AS FAST AS THE VALUE OF A BRAND NEW CAR

While most cars lose value with each passing month and miles, the steepest decline winner would definitely be the brand new car. Some new car models can lose 40% or more of their value in the first year, and some (new car) can even lose as much as 20% of their value the moment you drive off the showroom, on the first day!

Here is an example of depreciation costs for both local and continental cars. It shows the cost of a local car, both new and used and the amount of depreciation it has gone through in the past year.

EXAMPLE:

Year of Registration: NEW 2008 (RP in 2008)
Item: Proton Saga BLM (Auto)
Amount: RM37, 998

Year of Registration: USED 2008 (selling in 2014)
Item: Proton Saga BLM (Auto)
Amount: RM19,500
Depreciation Percentage: 48.2%

Year of Registration: NEW 2008 (RP in 2008)
Item: BMW 320i Sports (Auto)
Amount: RM245,800

Year of Registration: USED 2008 (selling in 2014)
Item: BMW 320i Sports (Auto)
Amount: RM118,800
Approximate Depreciation Percentage: 51.7%

Both cars experienced depreciation at similar percentages but the price of the continental car fell further as is usually the case. It is because the continental cars are the most expensive in the market, and buying the used continental cars means you would not have to bear the brunt of the depreciation costs that occur during the first year.

 

Images are courtesy of Google Image Search

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