Why buy a used car instead of a new car?
It goes without saying that the majority of people in South Africa can't afford to buy brand new cars. Everyone is looking for the best deals possible in terms of getting the most car for the least amount of money. Quite often, the buyer can
buy a better spec’d used car for the price of a new car. An example of this is that a new Datsun Go is in the R150 000 price range. In that price range, you could also get a 2016 Honda Ballade with around 80 000km on the clock. When buying a used car from a car dealership you will often see cars advertised as pre-owned and in this article why will unpack the difference between pre-owned and “normal” used cars for sale from dealerships.
Certified Pre-Owned
Certified pre-owned cars undergo the manufacturer's testing to ensure that it still meets the manufacturer's standards set out for the car when it was first purchased new. Most of the time, these cars won't be very old and are the same car brand as the dealership selling it.
The dealership will normally do
multipoint car check, check the
accident history, do any reconditioning if need and cars sold that no longer have any of its
new car warranty or service/maintenance plan left will be sold with a limited 24 months / 40 000km warranty or
service/maintenance plan from the same manufacturer (not an
extended car warranty). Roadside assistance is also commonly included for complete peace of mind and hassle-free motoring to you the buyer.
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These days, many cars are traded in after a lease period like
Mercedes-Benz agility finance and could be good deals as certified pre-owned cars.
Pros of buying Pre-owned
Peace of Mind
By buying a certified pre-owned, you can be satisfied that experts thoroughly checked the car before getting a stamp of approval. If anything happens, they will be liable to sort it out. Buyers also naturally trust OEM dealerships more than used car dealerships. Most dealerships, such as Land Rover offer a standard warranty on all the pre-owned cars that they sell and give a minimum 2 years/ 60,000 km warranty, as well as 2 years, 24/7 roadside assist. They also do an inspection on up to 165 checks on the car to ensure that it is in good working order. Other companies like VW don’t offer a warranty on pre-owned cars, and it is up to the buyer to purchase a warranty at an extra cost. Buyers should check with the dealer what warranties if any are offered on the car they wish to buy.
Saving Money
Cars lose value the moment they leave the showroom from new. Sometimes buying a certified pre-owned car means that you can get a car that's only been slightly used for much less than the same new car, and in most cases have at least some form of warranty. If the certified pre-owned car is relatively new, there might even be an existing service or maintenance plan which will be a further saving on expenses. Some manufacturers, like Land Rover, offer standard warranties on approved cars, while others like VW don’t offer warranties
Resale Value
Most people don’t
buy a car as an investment and look for the
best resale value possible. Provided the car continues to be taken to the brand dealer for servicing and repairs. If the car isn’t going to the brand dealership, it should at least be going to an RMI approved service centre.
Easier for people without car knowledge
Not everyone knows the nitty-gritty details of
what to look for or watch out for when buying a car. There are many people out there that are young or have never bought a car before who just want to buy a good, reliable car without spending too much effort. For those people, it could be better buying from a brand dealer.
Easier to finance
Since the car is coming from the dealer and is often a late model with low mileage, it’s easier to get vehicle finance than with an older used car.
Cons of buying pre-owned
Higher Price
Typically the price of a certified pre-owned car will be higher than the price of the equivalent used-car from private used car dealers. It costs time and money to approve the car, and the dealer also adds their mark-up.
Fewer savings
In some cases, the price difference between the new car and the certified pre-owned isn't worth the difference in price, as well as the difference in warranty. Sometimes there might be only one year left of the warranty or maintenance plan left. Considering this, it's always advisable to calculate the costs of further maintenance when looking at the price. Sometimes it can pay to get a third party
extended warranty to give additional peace of mind, after all, replacing parts such as
transmissions, turbos, etc. can be exorbitant.
Lemon Law
Regardless of how well the car is checked, there’s always the chance that the certified pre-owned is a “lemon” and will give problems in the future. Certified pre-owned also means having complete faith in the mechanic who checked the car, and with the possibility of human error, some issues on the car might go undetected. Dealers are also out there to make sales and sometimes
don’t give the customer all the details about the car.
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Used Cars
This can be a complicated area to navigate, especially for people without sound car knowledge. Going this route also involves a great deal of trust in the used car dealership or individual who’s selling the car. There will always be trustworthy buyers, as well as
untrustworthy sellers out there and the onus is on the buyer to research and do his homework. After all, there are some good deals out there, as well as many traps.
Pros of buying used
Lower Price
Most of the time, the used car will be cheaper than the certified pre-owned car because there aren't any checks involved, and the used car shop will probably add less of a mark-up compared to the OEM dealership. If the seller is an individual, there won't be any mark-up and the price might be even lower.
Ability to Negotiate
Some OEM dealers have the ability to negotiate on the prices of the cars on offer depending on the dealer, and the car on offer. Used car sales floors and individuals often have prices which are negotiable to an extent and the price can be lowered even further in some cases.
It could be exactly like the certified pre-owned car
Of course the certified pre-owned cars have been checked, but in essence, there are many unchecked cars that still meet the same criteria. It's possible for the buyer to take the car to a brand dealership or Dekra centre for a
multipoint check and then take out a third party extended maintenance plan. Again this depends on the car itself, and the mechanic that is
checking the car. When going this route, it's best to ensure that whoever is checking the car has the correct diagnostic tools and is qualified to work on that particular car. Getting a mechanic without the right tools or knowledge of the car is just asking for trouble.
More Options
Certified pre-owned cars usually are fairly new, so many older cars don't qualify. When it comes to used cars age doesn't matter, and depending on the buyer's tastes and budget, the range is almost limitless. This unlimited pool of cars can also be a disadvantage because
older cars mean more cars that could have problems.
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Cons of buying used
No guarantees
Most of the time there is no guarantee that the car will perform without a problem when bought used. If something happens, the dealer has obligation to sort it out due to the
Consumer Protection Act (CPA) which states that all goods including cars “are of good quality, free from defects and in good working order, and will be durable and usable for a reasonable period of time.” While the buyer is protected by the law, this can often be a grey area and can lead to disputes. Keep in mind that used car dealers and individuals also sell cars that still have OEM warranties, service and maintenance plans. Since the manufacturer is still responsible for those plans, there is some form of warranty.
Cars with voided warranties.
There may be some late model cars that look like attractive buys, but if the previous owner didn't use the prescribed maintenance or service plan, the warranty could be voided, leaving maintenance and repair costs solely with the new owner. Without knowing for sure how the car was maintained, it can leave a lot of uncertainty for the new buyer. Keep in mind that some used cars are cheap and
easy to service.
Inconvenience
Even if you find that fantastic lady-driven car that only went to the shops and back, the process is still more complicated than just going the dealership and buying a certified pre-owned car. For the used car you will have to get the
VIN number checks to find out the history of the car. Then get a mechanic to go back and check it for you, maybe even arrange with the seller to take the car for an inspection. If the car passes the tests, then it comes down to haggling over the price and eventually making a deal. This is before the paperwork starts. It’s much easier to buy a certified pre-owned car.
More knowledge required
When buying a used car there are so many things to look for. Buyers need to check the body for any signs of an accident, as well as
checking out all the other aspects of the car hoping that they don’t miss something. Even with a mechanic on hand, the check is only as good as the mechanic’s skills, or sometimes diagnostic tools. With a certified pre-owned car, the car has already passed all the checks to the manufacturer’s standards.
At the end of the day, both buying used and certified pre-owned have their own advantages and disadvantages, and it’s up to the buyer which route to take. Buying certified pre-owned gives that extra peace of mind, and is easier for people with less technical car knowledge, but comes at a price. Buying used can save a lot of money, but only if done correctly.
When buying and vehicle it’s worth doing a
VIN number check to ensure that everything’s in order. Using a
Vehicle valuation tool can also help to ensure that you are getting the best deal possible. If you have any
questions, or just need some car advice,
Wheel Index has industry professionals who can help you make the correct decisions.
with no breaks in between.
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