If you’re a fresh grad looking for your first car, chances are you’re looking at the Perodua Myvi. It offers great value for money and is packed with features, some of which aren’t even offered in cars twice its price. But then someone said you could buy a used Honda City for about the same price. So how should you decide?
Before we continue, we'd like to note that this isn't strictly limited to the Honda City. Other options can include the Toyota Vios, Honda Jazz, Volkswagen Polo, etc. Likewise for the Perodua Myvi, you could be looking at the Perodua Bezza, Axia or the Proton Saga and Persona. So this is more of a new car vs used car buying guide.
Previously, we’ve talked about the things you need to know before buying your first car. Maintenance and insurance were discussed in that topic so be sure to check it out by clicking on the hyperlink.
Those apply to buying a used car as well, and there are even more aspects to consider. For starters, the Honda City in question is likely made in 2016 or older, which means the factory warranty is about to expire or it already has expired.
This means if any part of the car were to malfunction or break post-warranty, you’ll have to fork out cash to repair it. This also means you’ll need to reserve some cash in case of any unexpected repairs as well as replacing wear and tear items.
But choosing cars like the Honda City and Toyota Vios are less of a risk due to their reputation of being reliable. Still, it depends on the overall condition of the car and how well the previous owner had taken care of it.
That’s something you need to keep in mind as well. Thoroughly inspect the car to see if it’s well taken care of and if was involved in any accidents. Check the body panel gaps, paint quality and finish, frontal area and boot floor for welding points, etc. If you’re not certain, bring a friend or a mechanic to check out the car.
If all seems well and you’re satisfied with the car and price, next step is applying for a car loan. The interest rate for a used car is typically in the region of 3.6% to 4.0%, which is quite a bit higher than a new car loan at around 3%. Down payments are generally the same between new and used cars at 10%, although some banks do offer car loans for graduates with up to 100% financing.
So to highlight the pros of buying a new Myvi – warranty, no wear and tear, and lower interest rate. On the flipside, you’re faced with higher depreciation.
As for buying a used City, you’ll get a bigger bang for buck since you’re essentially buying a car that is at one price segment up, and take less of a hit in depreciation. But you won’t get the peace of mind a warranty provides and interest rates are higher.
Put it this way, if you prefer a hassle-free ownership experience and you intend to keep the car for a long time, then buying a new car like the Perodua Myvi will be your best bet.
If you consider yourself to be car-savvy and like to tinker with your cars, then a used car such as the Honda City will be ideal for you.