Usap Tayo: Disadvantages of Buying a New Car

Usap Tayo: Disadvantages of Buying a New Car

Updated on June 21 2024

METRO MANILA, – There's nothing quite like being behind the wheel of a brand-new car.

Shiny paint, pristine interior and, of course, that unforgettable new car smell. All of these are immense sources of joy, whether you're a petrolhead or not.

But if you're looking for a great deal on reliable transportation, you are likely to find much better options in the second-hand market.

Before you hand over huge sums of your hard-earned cash at your nearest dealership, here are some reasons why shouldn't buy a new car:

Higher price

Everybody wants to save money, especially when you’re buying the second-most expensive thing in your life (after a house).

For example, a brand-new Mitsubishi Mirage G4 with a CVT starts at P819,000. But a three-year-old G4 with equivalent features could be sitting in your garage for less than half that price.

And even used cars can be paid through installment plans now. This means the amortization for a second-hand Mirage G4 can be under five figures a month.

In addition, you don’t just pay for the car when buying from the showroom. You must also account for comprehensive insurance, vehicle registration and other fees.

Fewer options for servicing

Another disadvantage of buying a new car is the maintenance.

Most manufacturer warranties require the vehicle to be serviced exclusively at authorized dealers, where prices can go sky-high. If you try to let others work on it, the warranty will be void.

Although a lot of buyers don’t take this into account before paying the dealership, the reality hits them hard when they have car trouble. This is especially problematic for vehicle owners who live outside large cities where there may be very few or no dealerships.

As a result, you will be forced to travel, just to keep the warranty intact. But with a used car, you can have it fixed at any mechanic or shop you want.

Depreciation

A new car loses a huge chunk of its value the moment you drive it out of the dealership.

This can be a problem if you want to upgrade to a larger or more premium car because the market value of your current vehicle has already plummeted. And it doesn’t help when the buyer wants to drive that price down.

Used cars, even those that are just two years old, are already substantially cheaper than their brand-new equivalents. That means you don’t lose as much money as time goes by.

Higher monthly payments

Since new cars are much more expensive than used ones, you will most likely get it through financing.

Although this is very convenient for buyers who want to have the vehicle right away, the years of succeeding payments may not be as manageable as you thought. Depending on the terms written in the contract, you are required to pay the total price of the vehicle plus the interest rate on a monthly basis.

The amortization also depends on your downpayment and the promos you got during the purchase. If you are unable to make your payments after a consecutive number of months, the bank will take away your car.

As a result, you will be left with a huge loan while having an empty garage.

Required co-maker

If your monthly salary is lower than the required income of the financing company, you need to have a co-maker to help you meet the requirements. This refers to someone who has a higher income than yours.

Aside from that, you cannot get a car loan if you are working and living outside the Philippines unless you have a co-maker. This is because banks want to make sure that you will not escape paying your financial obligation and take away the automobile during the contract period.

Indeed, the hassle of paying so much for a new car is why people go for second-hand vehicles. Automart.PH offers a wide selection of used cars at great prices, ranging from compact cars to pick-up trucks.

And if you’re looking for the finest used cars, check out Automart.PH Certified Used Vehicles. These are restored until they feel like new again. They also come with a three-day money-back guarantee and, for Gold Certified units, a one-year warranty.

Automart.PH Senior Content Creator VJ Bacungan contributed to this story.