What's better in the long term - used or new car?

[HelaS]

Hi all! I'm continuing to do car research in advance of purchasing my first car, ideally costing under 3 million rupees. I plan to use it for at least 5 years after the purchase. Important question: what is better economically, getting a brand new one for around 3 mil (Picanto, Wagon R etc) or buying a second-hand one from early 2000s  (Familia, Sunny, Civic etc) for around 2 mill? What concerns me is that given the old age and >100,000 km mileage of these used cars, am I likely to face heavy expenses in repairing and maintaining them within the course of 5-10 years, which might make the total cost of ownership equal to or greater than the price of a brand-new one? Thanks in advance for your advice

[NeroX]

Depends on what purpose you're buying a car for? A brand new car would be better in-terms of reliability, features. A used car on the other hand will give you car options maybe a level higher, better resale as its already depreciated, better/low cost spare availability.  Quoting from your example itself, the Picanto, WagonR would be what you'd call kei or mini cars whereas Sunny, Civic etc would be proper C-segment sedans.

If you're a young person who wants the car for casual usage on weekends, holidays etc I'd say save some money go for a used car. You'll have a bigger safer car to travel in & when the repairs do come you'll be able to learn a thing or two about what ticks inside. As long as you buy from someone who has maintained the vehicle well I'm assuming this cost won't be much. You can easily research on what parts generally wear out & check them for proper function before-hand. Plus you can research on specific models for known defects as older cars will have much information available on the internet etc.

If you're someone who's primary purpose is to get from point A->B on a regular basis with less time to diagnose, research on car matters, I'd say go for a brand-new car & use it until it makes sense to sell it at the prevalent market rates. The brand-new vehicle would depreciate faster hence you may end up using it for longer. Space/comfort wise it maybe a compromise but you maybe getting more features/options compared to an older car.

There's plenty of discussion on the topic in this forum so please have a look through those as well.

Edited March 29, 2018 by NeroX

[LashNeo]

If you buy a used car manufactured in early 2000; you may have to do few repairs here and there. No matter how well maintained they are; it is usual to come across a repair or two here and there. But; definitely you won’t have to spend the additional 10 lakhs you save by not buying a brand new one on those repairs. There will be few other benefits as well and it’s up to you to decide. The comparison would be as follows;

Buying a reliable used car for 20 lakhs

• Low cost in spare parts.
• Easy diagnosis and low labor costs for repairs as the models are well known by local mechanics
• More spacious than the brand new hatchbacks
• Some may even have more options than the brand new ones
• Better value in resale
• You can remain debt free (invest your cash, go on a trip or too, By some fancy stuff, donate to charity Oh.. the possibilities :D)

Buying a new car for 30 lakhs

• Better fuel economy
•  Peace of mind due to less repairs and company warranties
•  Sense of accomplishment in owning a new ride
• Opportunity to Impress the neighbors, “Pretend” friends,  relatives, nagging in-laws etc. etc.

[Clark'sson]

Unless you dont have any spare time to spend on a car (say you are a medical intern) go for the used car.

The band new car will come with a company warenty and peace of mind but will depreciate markedly during the initial few years.

The old car which has hit its initial depreciation will retain its value or according to sri lanka appreciate in value. The body parts will be much cheaper and servicing etc will be easy.

A new car will need to be maintained at the company or recommended place keep the warenty but you can send the used one to the local service (specialy great if you live outstation)

You can find body parts much cheaper than for the brand new. 

Youll not be that hurt by a dent. Lets say you trade paint with a tuk tuk. That will just buff off. But the new cars the buffer may fall off etc(lightweight and delicate) and also may need to touch up small dents too.

You may need to take it to the guarage and spend some time with the grease monkeys but youll learn about vehicles and may enjoy it.

You may need to do some repairs in a old car when you buy it with the amount you check before you buy you can reduce that amount. You also should consider there are some expenses involving a brand new car too like. Registration tinting carpeting seat covers maybe some protective films. Accessories. In car entertainment etc. May be a set of rims. Running in services. So may be it will come close to or exceed  the repair cost of the used car.

So best option do your research buy a old one after a through checkup. Take a known bas when you go to see cars

 

Edited March 29, 2018 by Clark'sson

[matroska]

5 hours ago, HelaS said:

Why are old cars' value appreciating in SL?

For the same reasons Clarksson mentioned - plus market perception and the BS shovelled by buy-and-sell folks. However this is changing a bit - you can ask any one who tried to sell a used car of late how difficult it is due to the mass appeal for new kei cars.

Also in the past (few years ago)   and mostly in outstations people did not know that much about non mainstream brands: 

'Perodua? aaa mokadadda ee' 'Hyundai apooo e mokadda'  'Sunny hondai' 'Corolla hondai'  

Anyways of late old cars value appreciating is a dying trend - the fact that you can get a 2018 kei car or a 2010ish hybrid  for the same price as a 121 from 2002  that has been abused and painted over with dulux weather shield has made people think differently. But still unlike in other countries older cars still hold their value due to their ease of maintenance.  

 

[MV-5]

On 3/30/2018 at 2:15 AM, HelaS said:

Why are old cars' value appreciating in SL? 

This is a myth.we all know bank FD rates are lower than the inflation rate in Sri lanka. 

what actually happen is LKR depreciates. buy a 4 million car today, after 5 years if you can sell it for more than 7.5 million then you are right. 

[HelaS]

1 hour ago, NeroX said:

Depends on what purpose you're buying a car for? A brand new car would be better in-terms of reliability, features. A used car on the other hand will give you car options maybe a level higher, better resale as its already depreciated, better/low cost spare availability.  Quoting from your example itself, the Picanto, WagonR would be what you'd call kei or mini cars whereas Sunny, Civic etc would be proper C-segment sedans.

If you're a young person who wants the car for casual usage on weekends, holidays etc I'd say save some money go for a used car. You'll have a bigger safer car to travel in & when the repairs do come you'll be able to learn a thing or two about what ticks inside. As long as you buy from someone who has maintained the vehicle well I'm assuming this cost won't be much. You can easily research on what parts generally wear out & check them for proper function before-hand. Plus you can research on specific models for known defects as older cars will have much information available on the internet etc.

If you're someone who's primary purpose is to get from point A->B on a regular basis with less time to diagnose, research on car matters, I'd say go for a brand-new car & use it until it makes sense to sell it at the prevalent market rates. The brand-new vehicle would depreciate faster hence you may end up using it for longer. Space/comfort wise it maybe a compromise but you maybe getting more features/options compared to an older car.

There's plenty of discussion on the topic in this forum so please have a look through those as well.

Thank you NeroX, for the very useful reply!

[HelaS]

1 hour ago, LashNeo said:

If you buy a used car manufactured in early 2000; you may have to do few repairs here and there. No matter how well maintained they are; it is usual to come across a repair or two here and there. But; definitely you won’t have to spend the additional 10 lakhs you save by not buying a brand new one on those repairs. There will be few other benefits as well and it’s up to you to decide. The comparison would be as follows;

Buying a reliable used car for 20 lakhs

• Low cost in spare parts.
• Easy diagnosis and low labor costs for repairs as the models are well known by local mechanics
• More spacious than the brand new hatchbacks
• Some may even have more options than the brand new ones
• Better value in resale
• You can remain debt free (invest your cash, go on a trip or too, By some fancy stuff, donate to charity Oh.. the possibilities :D)

Buying a new car for 30 lakhs

• Better fuel economy
•  Peace of mind due to less repairs and company warranties
•  Sense of accomplishment in owning a new ride
• Opportunity to Impress the neighbors, “Pretend” friends,  relatives, nagging in-laws etc. etc.

Thanks, LashNeo. Very nice comparison there. And you made me laugh haha

[HelaS]

6 hours ago, Clark'sson said:

Unless you dont have any spare time to spend on a car (say you are a medical intern) go for the used car.

The band new car will come with a company warenty and peace of mind but will depreciate markedly during the initial few years.

The old car which has hit its initial depreciation will retain its value or according to sri lanka appreciate in value. The body parts will be much cheaper and servicing etc will be easy.

A new car will need to be maintained at the company or recommended place keep the warenty but you can send the used one to the local service (specialy great if you live outstation)

You can find body parts much cheaper than for the brand new. 

Youll not be that hurt by a dent. Lets say you trade paint with a tuk tuk. That will just buff off. But the new cars the buffer may fall off etc(lightweight and delicate) and also may need to touch up small dents too.

You may need to take it to the guarage and spend some time with the grease monkeys but youll learn about vehicles and may enjoy it.

You may need to do some repairs in a old car when you buy it with the amount you check before you buy you can reduce that amount. You also should consider there are some expenses involving a brand new car too like. Registration tinting carpeting seat covers maybe some protective films. Accessories. In car entertainment etc. May be a set of rims. Running in services. So may be it will come close to or exceed  the repair cost of the used car.

So best option do your research buy a old one after a through checkup. Take a known bas when you go to see cars

 

Thanks mate. Why are old cars' value appreciating in SL? That's super weird and backwards. Also, could you suggest any reliable places where one might look to buy a used car?