Brand New vs Used Car: factors you need to consider

Purchasing a car is one of the most significant life decisions and investments anyone will make.

While there are many cars available to choose from, there is so much more to consider when deciding than just the make and model of the vehicle – like choosing between a brand-new car or a second-hand vehicle.

If you’re undecided, we’ve laid out a few factors you need to consider to help you decide which of the two options works best for your needs.

4 things you need to consider when buying a new car or used car

Whether to get a new or used car is an age-old debate.

People will have varying opinions on which choice is the right one – but we believe it’s important to lay everything out so you can make the best choice for your unique situation.

Here are 4 factors to consider before you make your final car purchase decision:

1. Reliability

   New car
   There is no doubt that buying a new car comes with a solid dose of peace of mind. A new car will be (typically) more reliable and less likely to break down or need repairs. And if anything does go wrong, your new car warranty (usually three to five years) will have you covered.
   
   Most new cars come with a certain warranty based either on total kilometres or for at least three to five years. If you plan on selling the car within the warranty period, it usually passes onto the new owner which can be a handy bonus to help you sell your car faster. 
   
   Used car
   The word “used” in the term “used cars” says it all – buying one of these means you are investing in a car that has been driven by someone else for a period of time. Simply driving a car around will lower that vehicle’s overall condition, which means it will have a shorter lifespan by the time you purchase it. Not to mention, there is no way of knowing how well or poorly a car has been treated by the previous owners.
   
   

2. Price

   New car
   Buying a new car is more difficult on the wallet. If you’re using an auto loan to finance the purchase, then you’ll most likely borrow more than you would with a used car and end up paying more interest over time.
   
   However, it’s important to remember that since the car has newer parts, this is also beneficial to your long-term costs as you won’t have to go in for checks and part replacement as often as you would with a used alternative. Running costs are just as important to consider when buying a car – and if you buy new, these will generally be less.
   
   Used car
   Used cars of up to three years old can hold value extremely well. On the other hand, cars over five years old generally offer much cheaper purchase prices. It’s also important to note that certain brands are depreciation monsters, meaning you can pick a car up a relatively new car cheaply. There’s also greater bartering potential, especially with a private sale.
   
   

3. Waiting time

   New car
   If you’re buying a new car, you might have to wait weeks or even months until you’re sitting behind the driver’s seat.
   
   If it has to be ordered from the factory and delivered from overseas, shipping times can delay the arrival of your highly anticipated purchase. For some buyers, this simply isn’t an option, especially if their current vehicle has broken and they need to get back on the road quickly.
   
   Used car
   Almost any used car listed for sale will be available, right now. A swift morning phone call to the seller could have you in new wheels by the afternoon.
   
   Of course, this ignores the lengthy search efforts to find a perfect vehicle for you, but at least once you have decided you’re unlikely to wait 12 months for the seller to supply the vehicle.
   
   

4. Depreciation

   New car
   Car depreciation is defined by the drop in a car’s value over time – and it occurs as soon as you purchase a vehicle and begin driving it on the road. This value decrease is quite rapid, with most cars losing 15% or more off their car’s value as soon as it’s driven out of the dealership, and up to 30% by the end of the first year.
   
   Used car
   Cars lose value with each passing month and kilometre, but the steepest decline happens right away as soon as the keys change hands. However, with a used car, there’s no depreciation the second you roll off the lot.
   
   There’s also less mental depreciation, and no need to worry about the first car park ding or rock chip in the paint because chances are the car’s previous owner or owners took care of those for you! That said, there may be some mental anguish when it comes to less obvious damage about how well the car’s engine was treated.
   
   

The important thing to remember is that buying a car is usually an expensive journey regardless of which option you’ll choose. Ultimately, after everything is considered, it comes down to your personal preference and unique needs.

Ready to buy a new car or a used car?

Whichever you decide to choose, it helps to have guidance from car-buying experts who can find you the best deals and make the experience seamless as you choose your dream car.

If you find that you still have general questions about your car financing options, our team at Private Fleet will be happy to answer your concerns and help you find the best deals for your car purchase. Simply reach out to us and we can have a chat about your options, regarding buying a new car versus a used car.

Make the most out of your car purchase with Private Fleet.

Private Fleet empowers you to get all the fleet benefits as a private buyer.

Backed by decades of industry experience, fleet buying power and a network of car dealers across Australia, we are here to make sure that buying a new or used car will be as straightforward as possible for you.

Buying a new car is a memorable experience – let us make it hassle-free, too.

Reach out to us today for a seamless and easy car-buying experience.

Ready, Set, Charge!

If you are one of the many who has opted for an EV for whatever reason, then the time will come when you have to charge it up – just like you have to charge up your phone, e-reader or laptop. However, charging an EV is not quite the same as filling up a petrol or diesel tank, and if you’ve never done it before, there are a few things that you’ll have to get used to, especially regarding the different charging speeds.

Deep breath required here. There will be maths.

With all types of charging, the exact amount of time you’ll need to charge the battery will depend on the voltage of the outlet and the battery capacity. The formula for working it out is:

E = P × t

Makes you feel a bit like Einstein, saying that. E is energy, P is power and t is time.  Rearrange this and you get t = E/P or, in plain language:

Your EV’s battery capacity (in kWh) ÷ power output of the charger (in kW) = hours of charging time

This equation, however, mainly applies to charging to 80% rather than 100% (and this is the charge time figure that you’ll see in specs and stats from the manufacturers of EVs). This is because charging isn’t a linear process and it slows down as the battery gets closer to full charge. It’s a mechanism that helps prevent overheating. If you want to charge to 100%, bear in mind that doing so will take a bit longer.

The thing that most people are concerned about is the charging speed. In fact, the charging times are one factor that can put people off purchasing an EV, especially an all-electric BEV or a PHEV. Here in Australia, we have reasonably sensible names for the different charging speeds, unlike in other countries, where you have to ask a few questions to be sure what you’re talking about during a discussion of fast charging – you’ll hear some people talk about fast charging as something different from rapid charging (I feel sorry for those who don’t speak English as their first language because – well, you try explaining the difference between fast and rapid!). Here, we keep things straightforward, calling the two most common charging speeds Level 1 and Level 2, with only the fastest type being called “DC fast charging”.   

Level 1 charging is simplest type of top-up charging that you can do at home or anywhere else you can access a standard common or garden power socket.  It seems very simple but the trouble is that this type of charging is very, very slow. Recharging a completely drained battery will take at least a whole day, as in a 24-hour day.  It could even take 48 hours, which is fine if you’ve got the whole weekend to recharge your car’s batteries as well as your own and don’t have to go anywhere.  On the other hand, if you find yourself at a relative’s place in the country and not enough charge to get you home, you can just plug in and recharge enough to get you home again, or at least to the nearest public charging station (it would be nice if you compensate your relative for the power you’ve used, same as if they let you have a jerrycan of petrol if you’d run out). You may hear this referred to as trickle charging.

Level 2 charging is the sort of charging you do with one of those wall boxes in your home, and Level 2 chargers are what you’ll find in typical public chargers of the kind you’ll see at the supermarket, mall or gym and, if you’re really lucky, at work. Typically, you get around 7.2 km of mileage for every 10 minutes of charging with a 7.2 kW unit, or 22 km of mileage for every 10 minutes with 22 kW charging. (Is anybody else getting flashbacks to the sorts of word problems we had to solve at school?)

However, remember that these mileage figures are approximate and are under ideal conditions. If you have a heavy load, if you have to go into a headwind, or if you want to run the lights or heaters or play music, you’ll reduce the range.

Commercial outlets will often provide chargers not just for their customers’ convenience (although this is certainly part of their motivation) but also as a marketing ploy. If you need to ensure that you’ve got enough charge in your battery to get you home again after work and shopping, then you may need a couple of hours to charge the battery to the right level. However, it may take you only one hour to do your workout at the gym or to pick up your groceries, leaving you with time to kill. Chances are that you’ll spend time in the gym cafeteria or that you’ll spend a bit longer in the supermarket browsing the shelves to fill in the time and will thus spend more money, which is what the commercial outlets are hoping for.  Just be aware of this little ploy and budget for it, develop some iron self-discipline and a healthy bit of patience, or take a book. Just don’t make the mistake of sitting in your car doing things on your phone or laptop with your device plugged into the charger in the car!

Speaking of budgets, a home wallbox will have to be bought separately when you buy a new EV. It’s a good idea to buy one, as otherwise you’ll be relying on super-slow trickle charging or public charging stations to top up the battery. It will also need to be installed by a professional electrician, like your oven or hot water cylinder and for the same reasons. You’ll also have to factor the cost of labour in as well. This is something to keep in mind.

DC fast charging (aka rapid and ultra-rapid charging) uses DC electricity, whereas Levels 1 and 2 use AC electricity. The best known DC chargers are the Tesla superchargers even though, ironically, the original Nikola Tesla promoted and popularized the use of AC electricity. How fast this type of charging will be will depend on the battery, but charging can be done in less than an hour, depending on the kW rating and the type of car. Some EVs charge faster than others. It has to be remembered that not all EVs are compatible with DC fast charging; this is often the case with PHEVs. This is something to check and think about when you buy an EV.

It’s also important to understand the different types of connectors or plugs, but that’s another story for another time.

What are the best ways to finance your new car purchase?

If you’re looking for a sign to finally buy that dream car, this is it. 

Next to a home, a car is probably the biggest investment that you can make. It’s also an enjoyable and memorable experience too – but often, worrying about the finances can get in the way of fulfilling that dream. 

To help you prepare for the ride that is buying a car, we have listed some of the best ways to finance your vehicle purchase. 

Read on and find out which option may work best for you. 

Since buying a car is a big decision, you want to start by considering your circumstances, preferences and intentions before searching for a car that will take you either from A to B, accompany you on your next adventure, move the family or make an impression when cruising the streets. 

Depending on what you need, there are several car finance options that you can choose from to pay for your car. 

5 ways to finance your new car purchase 

1. Outright payment through savings
   

   This isn’t technically financing!

   Well yes. But we are adding this to the list because the most upfront way to pay for a car is by paying outright with cash using your savings. According to Canstar research, it takes around two years to save up for a car, depending on the model and make that you’re looking for.

   However, if you are looking for more options to finance your car, there are several available out there.

2. Applying for a loan
   

   The next option is applying for a car loan. This vehicle loan can be paid off through regular repayment over a period of time – which is usually up to 5 years. This is a good option if you’re buying a personal car as this loan can be used to finance the full cost of the purchase, which includes:

   ✓ on-road costs
   ✓ insurance
   ✓ warranties 
   ✓ loan protection

   Tip: interest rates for brand-new cars are typically more competitive than interest rates for used cars.

3. Car Finance Lease
   

   If you’re looking for low or no deposit terms, another option is to apply for a car finance lease. With a vehicle finance lease, terms can be set and with fixed interest rates, repayments can be budgeted throughout the leasing term of the car. You also have an opportunity to own the car by the end of the term.

4. Commercial Hire Purchase (CHP)
   

   In a Commercial Hire Purchase Agreement, you are given the right to use the car in return for regular payments during the term. By the end of the term, you have the option to pay a balloon payment to transfer the title of the car to your name.

   Note: you can claim interest repayments as well as the depreciation of the asset – in this case, your car – when using a CHP.

5. Novated lease agreement
   

   Last on our list is another increasingly popular form of vehicle financing: a novated lease. The novated lease is a three-way agreement between yourself, your employer and the financier, where your employer will be responsible for the repayments using your pre-tax salary.

   To learn more about novated lease agreements, check out this article: Novated Lease and Leasing Explained. 

These are just some of the car finance options out there – but this is just general information only. The right finance option for you must take into account your unique circumstances and your goals for this purchase – so always do your research. 

While we can provide general care financing information, if you have any specific questions, it’s best to ask your financial professional. 

Ready to buy that new car? 

Whichever payment option you decide to choose, it helps to have guidance from car-buying experts who can find you the best deals and make the experience seamless as you choose your dream car. 

If you find that you still have general questions about your car financing options, our team at Private Fleet will be happy to answer your concerns and help you find the best deals for your car purchase. 

Simply reach out to us and we can have a chat about your options. 

Make the most out of your car purchase with Private Fleet. 

Private Fleet empowers you to get all the fleet benefits as a private buyer. 

Backed by decades of industry experience, fleet buying power and a network of car dealers across Australia, we are here to make sure that buying a new car will be as straightforward as possible for you. 

Buying a new car is a memorable experience – let us make it hassle-free, too. 

Reach out to us today for a seamless and easy car-buying experience. 

Should I Buy This Year’s Model?

When we think of the best time to purchase a new car, there’s often a lot spoken about the end of financial year sales, but the end of the calendar year is also a popular choice. Of course, that was mostly during the pre-pandemic era, as since then, the supply drought has hampered new car buyers negotiating power somewhat.

Nonetheless, cars that aren’t sold by the end of the calendar year will often enter the New Year with discounted prices. This is because dealers are reluctant to hold stock for a vehicle that in the eyes of buyers may been seen as superseded – particularly as months go by, and the vehicle still carries the tag of being last year’s model.

Why is the end of year a big deal?

One of the factors that often spurs this late rush to clear stock is the fact that models brought in from abroad can take several months to reach our shores. That has become an even bigger issue over recent times, with new car buyers facing waiting times in excess of a year for certain models.

In any case, cars may arrive carrying a build plate that differs from the period the vehicle is being sold.

Before the vehicle itself is available for sale, it requires certification and approval. Upon approval the vehicle is designated a compliance date, which can vary considerably against the build plate when all the above is considered.

Therefore, as the end of year approaches, the leeway becomes finer and finer. Dealers may be left with a couple weeks to clear a vehicle that has actually been held as stock on consignment for a period of months.

Last year’s model vs this year

So then, what about the particular differences between cars with a different build year? Are you necessarily missing out on anything by purchasing last year’s model, or a model that is about to be replaced?

When one considers the downside of purchasing an end-of-year clearance vehicle, the most prominent shortfall is often tied to the depreciation of the car and its resale value. These are both aligned to the year of the vehicle as opposed to the month it was from.

Secondary to that, differences vary depending on the manufacturer. In many instances, changes might be limited to cosmetics – differences in colour, interior styles, trims, etc. The changes could be functional, such as better sat-nav, electronic configurations, and so forth. Alternatively, differences could be more profound. Such examples would include things like improved fuel efficiency, engine tweaks, adjustments to the ride and suspension of the vehicle, advanced safety aids, and more.

With the above in mind, it becomes important that you do your homework to establish the build date of the vehicle in question (usually found under the hood on the VIN), as well as the specific trade-offs between an end-of-year model, and the forthcoming replacement. The most notable changes tend to occur in cycles. Mid-life upgrades tend to be modest advancements, while new generation releases are comprehensive upgrades. So the timing of your purchase could be the most influential factor.

And if you are opting to be one of the first to drive away in next year’s model, given lengthy wait times at the moment you’d better start your search early.