New vs used car: which is right for you?

New or used? It’s a question that almost all car buyers ask themselves at some point and there are arguments for each.

Based on our experience, with the help of our network of car dealers and feedback from clients, we’ve put together this guide to help you make the right choice for you.

New vs used cars: the pros and cons

To start, we’ll have a look at some of the pros and cons of buying a new car compared to a used car.

Buying new


1. It’s new

For many of us, a car is the second most (or most) expensive asset we’ll ever own and knowing that no one else has ever used and/or potentially abused it can be pretty compelling.

That new-car smell and unblemished… everything, really confirms that no one else has ever spilled food or coffee inside, let fur babies roam about in the back or driven too fast over bumps.

2. Lower running costs

Capped-price servicing*, brand new parts, fresh tyres and needing zero repairs can mean lower running costs, at least for the first few years.

*Some dealerships offer capped-price servicing, which means you’re provided a list of the maximum cost of scheduled services ahead of time so there’s no bill shocks.

3. Finance can be cheaper

Did you know that around 90% of new vehicles on Australian roads are purchased under finance? New cars almost always attract cheaper interest rates because typically, new cars have a higher value and a lower chance of breaking down.

4. You choose the features, specs and equipment

Buying a new car means choosing the colour, trim level and dealer options to suit your needs and preferences.

Most models have a range, usually referred to as ‘trim levels’. As the trim level (and price) increases, more features are added, for example, larger wheels, a more powerful engine and driver-assist technology like adaptive cruise control.

5. Warranty

Although late-model used cars are often still under their factory warranty, a new vehicle means you’ll have the maximum amount of time while it’s covered.

6. The latest tech

A new car means you’ve got the most modern technology which includes safety, design and driver-assistance features.


1. Depreciation

The value of a new car can drop dramatically, around 30% by the end of the first year in many cases. This can make selling the vehicle a sting in the hip pocket when you go to sell it.

2. Wait times

New cars have delivery wait times, some of which can blow out to months. This means you’ll need to plan in advance, which can cause issues if your current car is struggling.

3. It’s expensive

Buying new from a dealer often means that you’ll be paying top dollar and you likely won’t be able to haggle the price much, if at all.

Buying used


1. The price

If you fancy your haggling skills, you could negotiate a great deal on a used vehicle from a private seller. For example, if the car you’re looking at has some wear and tear, you can usually use them to knock the price down.

2. Availability

Not too fussed with the trim level or options? Unlike new cars, you can pretty much get your hands on a used car whenever you’re ready.

Many new vehicles attract lengthy wait times that can sometimes extend to months.

3. Lower prices can mean lower insurance premiums

As used cars are cheaper than new versions, you won’t need to insure them for as much which means lower premiums.

4. Resale value

Depending on the year, make and model, you’ll likely lose less in terms of depreciation on a used car. This is because the bulk of the depreciation occurs within the first few years of a vehicle’s life.

For example, at the time of writing, a new top-of-the-range Toyota Camry comes in at just over $50,000. You can pick up an equivalent 5-year old used Camry for around $36,000, roughly a 28% discount.

5. Trade-in convenience

If you currently have a car, you may be able to trade it in if you are buying your next car from a used-car dealership. This can be convenient and speed up the selling process. Just keep in mind that it is a good idea to weigh up how much you may be able to get for your car in a private sale compared to at the dealership before you trade in.


1. Uncertain history

Regardless of the service history, you can never know exactly how the car had been treated before you bought it.

2. You’ll need to do your due diligence

Try before you buy – or at least pay a professional to do so. When buying a used car, it is a good idea to get it inspected by a qualified professional to ensure there’s no hidden damage.

3. Wear and tear

Most used cars have some form of damage. For example, chips and scratches on the paint, faded headlights or marks on the interior.

These may not affect the way the car drives, but it is up to you to determine what type of imperfections you are content with.

Top tips: Ask yourself these questions when deciding on a new or used car

If you’re undecided whether a new or used car would suit your needs better, here are some thought starters that could help.

1. Will you spend long periods of time in the car?

If you need to travel a lot for work, to commute or enjoy road trips, you could be spending large amounts of time in your car.

A new car means a clean and comfortable interior, which could include the latest driver-assist features like a big navigation screen, and safety alert systems to give you peace of mind.

2. Will you park the car outside most of the time?

If so, you risk sun damage (like headlight and paint fade).

A used car might be better as there’s less depreciation to worry about.

3. Will your passengers be kids and pets?

Although these passengers can be tough on interiors, having the latest safety features can be really important.

New cars come with the latest safety gear.

4. Will you do a lot of stop-start driving in heavy traffic?

Driving in peak hours can mean a lot of petrol consumption and be tough on brakes and other components.

A new car will mean a full warranty and ideally, capped-price servicing. Newer cars may also offer greater fuel efficiency.

5. Will you be carrying large, heavy or bulky cargo?

Sports equipment and building supplies for example can wreak havoc on a car’s interior.

A used car that already has some wear and tear, or is worth less overall, can mean less concern about interior chips and scratches.

6. Will the price and running costs match your budget?

Do the math. Really consider your budget and future plans, sit down and go over all the expenses and running costs.

Getting a few quotes and knowing your numbers can really help when planning for a new or used car.


The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates subject to change. Approved applicants only.

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