Owner Review: A highly value-for-money purchase - My 2016 Subaru Forester 2.0IP in Malaysia
The Movement Control Order (MCO) in place to control the Covid-19 pandemic has put a huge speed bump on the various economic sector.
The automotive industry has come to a complete halt as JPJ (Road and Transport Department Malaysia) has yet to resume new private vehicle registration (services related to commercial vehicles are available).
It’s only a matter of time before consumers can go out and purchase their next perfect car. But with the soft economy that will prolong for the foreseeable future, you may begin to wonder whether it is better to buy brand-new or used cars.
Before we proceed, we’d like to set some context for this article. This guide is mainly for those who are shopping with a sub RM 200k budget. If your question is whether you should get a brand-new Porsche or a used Ferrari, sorry, this guide does not apply to you.
New cars – safest option but limited choices
Brand new cars give you peace of mind, which is quite a good feeling to have during these challenging times.
Every new car purchase comes with a manufacturer-backed warranty so you know you will be covered for the next 4 to 5 years. For every defect that is covered under the warranty period and terms, you will be able to avoid large repair bills.
Sometimes you may also come across Free Service Packages which will further lower the cost of ownership. Brands like Mazda, Volkswagen, and BMW offers complimentary Free Service Packages for every new car purchase.
New cars are also ‘easier to buy’ (we loosely use this term) because you are able to secure the maximum 90% financing margin and 9-years tenure car loan from banks. This reduces the upfront cost and monthly repayments which is a big plus point.
At times, carmakers offer low-interest rates or special cash rebates on a new car.
However, the downside is that you will be limited to cars within a certain segment based on your budget. Say you have a budget of RM 80,000 you will be limited to cars like the Toyota Vios, Honda BR-V, and Volkswagen Polo.
With a used car, you get to have more variety of cars to choose from.
Used car – cheaper to buy but maintenance might be a problem
For the same RM 80,000 budget in the used car market, you are presented with options like the 2016 Honda HR-V, 2014 Toyota Camry, or even a 2015 BMW 3 Series.
With the same budget, shopping in the used car market you get to indulge in much bigger, luxurious, and sometimes better cars. You also get to sift through different colours, mileage, service records, and condition. If you follow our nifty guide on buying a used car, finding one that checks all the right boxes is not difficult.
As attractive it may seem, the cost of buying a used car is not as straightforward as a new car. Firstly, banks charge a higher interest rate on used cars and a shorter loan tenure for vehicles older than 3 years (maximum 7 years).
What this means is that despite costing lesser to buy, a used car might have higher monthly loan repayments than a new car. Make sure to take this into consideration if you are trying to manage your monthly commitments.
Last but least is maintenance and repair costs. Despite finding a car with complete service records with a clean bill of health, wear and tear for an aged car is inevitable. Make sure to prepare some budget to replace wear and tear parts such as brake pads, suspension, bushings, and tyres, just to name a few.
Another consideration that many used car buyers are not aware of is that even if you purchased a BMW 3 Series for RM 80,000, you are actually maintaining a RM 200k car. Be very sure that you are able to comfortably bear the cost.
So how to pick?
There is no right or wrong answer but here is a general guide:
If you are looking for a fuss-free motoring experience at a set budget, a new car will always be the smarter and safer choice.
On the other hand, if you have a limited budget but need a particular car to suit your needs, say large sedan or SUV, a used car is the way to go and there is nothing wrong with that. Just be aware of the hidden costs that come with buying a used car and follow our used car buying guide.
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