YES, you already understand the economic implications of this Covid-19 virus in almost every sector of the economy. If you are part of the lucky 1.88% of the Malaysian population with large cash reserves, the next few paragraphs mean nothing to you.
If you just bought yourself a new car a few years ago, sit tight with it and wait out this coming economic downturn before looking to sell it and buy yourself a used car as the possible depreciation on your current newish car might not cover the current outstanding loan on your car.
It is best that you try and keep the monthly payment low and hope that your financial situation gets better before repossession gets called up by your finance company.
Now, if you were already planning to buy a new car a few weeks ago and your financial situation this past month has gone ‘south’, it is best you look at buying a used car which has been hit hard by depreciation and the selling price in the used car lot has been marked down by the dealer who is facing financial issues.
Here are six possible reasons why a used car might be worth a look this final few weeks in 2020:
- A used car will cost less as it has already depreciated a lot in value the moment it left the showroom.
- A used car will have lower yearly insurance premiums as the insurance premium is based on the current used value of the car.
- It is easier to get a 100% loan or at least 95% loan on a used car as used car dealers ‘play’ with the sales invoice and most have a ‘friendly’ working relationship with their car finance officer.
- New cars depreciate the fastest in the first two years of ownership, so buy a 25 month old or more) used car.
- Modern cars in the past 5 years are built better than ever so there is less risk than before in buying used, however you need to still check the service history and dealer accident history if any.
- Most modern cars in the last 5-8 years come with strong warranties, so the previous owner of the car would have taken full advantage to change as many parts as possible and would have done all the product recalls.
Yes, for many car buyers, young and old, male or female, buying a used car is a scary experience as they do not know how to check for previous accidents, water damage, electronic issues and even worse, a total ‘lemon car’.
This is why today there are a number of online car classifieds that offer an inspection service and a ‘trust’ evaluation document on a used car. They also offer a limited warranty on a used car that goes through their website.
Using their service can be a little more than buying direct from the owner of the car on sale, but the piece of mind for the person who is rather clueless about checking used cars makes all that worthwhile. Stay well and wear a mask when visiting the used car dealers. – The Vibes, November 20, 2020
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