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Is It Better For Malaysians To Buy A Used Car Or A New Car?

Would the risk of buying a used car be worth your money?

 

With the cost of new cars in Malaysia being so expensive, some of us may opt for cheaper alternatives. If we are willing to explore the possibility of buying a used car instead, we will be able to find much cheaper deals.

Getting Value For Money Vs Being Worry-Free

The reason why someone would prefer a new car, despite its higher price, is because they are more likely to enjoy a worry-free experience. Unless the car is already defective, most new cars would not give their owners problems for at least 5 years.

On the other hand, the value of buying a used car lies with being able to pick up a good car without any major problems at a much lower price.

Depreciation Of New Cars

The rate of depreciation for new cars can be quite high. In 5 years, a new car can lose up to 50% of its original value. More expensive cars incur higher depreciation. A buyer of a brand new car can easily lose up to tens of thousands of ringgit every year due to depreciation.

When buying a used car, the rate of depreciation would be lower as the car ages and approaches minimum value. For reliable cars that are more than 7 to 10 years in age, some of us may even be able to afford to pay for it without taking a loan. With proper care and maintenance, such cars could last a further 5 to 7 years without much depreciation.

Read Also: How Much Are You Really Paying When Buying A New Car?

9 Ways To Inspect A Used Car

To save ourselves from the headache of being stuck with a used car with major problems, we first need to know what to look out for.

Here are a couple of things to look out for in a used car to minimise the risk of choosing a used car that comes with a plethora of problems.

  1. Check For Structural Damage

This is important because any structural damage to the car’s chassis could mean the difference between life and death in an accident. Structural damage would affect the ability of a car to stay in control in an emergency, or the amount of impact it can take before breaking apart.

One way to check for structural damage would be to hit the brakes hard without holding on to the steering wheel while on a flat clear road (ensure that no cars are behind you!). If the car swerves unexpectedly to either side, that could be a sign of a damaged chassis.

  1. Look Out For Weird Sounds From The Engine

If the engine is louder than usual, or starts making weird noises, it is usually not a good sign.

  1. Look Out For Weird Sounds While The Car Is Moving

If the car starts making weird noises while going over bumps on the road, it hints at a worn out undercarriage that would be quite expensive to fix.

  1. Ensure That The Interior Is In A Good Condition

Make sure that the interior does not smell bad, or show signs of being in a bad condition. It could be indicative that the vehicle has been in a flood.

  1. Check For Loose Wires Or Any Excessive Wear & Tear In The Engine Compartment

Loose wires or parts that look worn out in the engine compartment could cause massive problems that are going to be difficult to troubleshoot in the future.

  1. Check For Any Oil Leaks

Oil leaks could damage the engine over time and be expensive to fix. Look out for dark patches on the engine block and dark spots on the floor below where the car was parked overnight.

  1. Check For Excessive Soot In The Exhaust

Excessive soot in the exhaust pipes could be an indicator that the engine has been worn out and is in need of an overhaul. Such cars would usually be underpowered and consume a lot more fuel due to the degradation of the engine.

  1. Check That All Electrical Components Are Working

Electrical components can be expensive to replace. Check that all the lights, odometers, power windows and various electrical components are in good working condition.

  1. Research & Check For Any Known Problems With That Particular Model

Sometimes, the problem lies with the make and model of the car. Certain makes and models are known to have specific issues. A simple online research would reveal most of these problems via the reviews from existing owners.

Are You Willing To Go Through The Trouble?

The guide above would help reduce the chances of picking a lousy used car. That being said, it is still a lot of work for you to do, assuming you are even proficient enough to identify the problems in the car.

If the savings from buying a used car instead of a new one are significant enough, it might be worth the trouble since we could use the extra cash we’ve saved on investment opportunities that could help us grow our wealth.

DollarsandSense is a website that aims to help people make better financial decisions, one interesting bite-sized article at a time. Like us on Facebook to stay in touch with our latest article. 

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DollarsAndSense Malaysia is a website that aims to help people make better financial decisions, one interesting, bite-sized article at a time. Like us on Facebook to stay in touch with our latest articles.