Can I buy a new car? Should I buy brand new? Is it a responsible thing to do? How much does it really cost me? Do you own a new car?

 


Most of my life I wondered what it would be like to buy a new car!  I never had one up until recently, I could never justify it, ever!

Like most of you, my parents told me "If you buy a new car you have lost $20,000 just by driving it off the lot"  I believed it!  Not sure why, but I did.  Not even sure why they said it!  They had little or no experience with buying a new car so how on earth did they know?  They were the only person who I ever spoke to about buying one so I had nothing to compare their comment to.

You all know by now, I am big on numbers.  Numbers don't lie, they have no emotion.  

I also know that, like the picture above, when you buy a second hand car, you never know what is under the bonnet, in this case, a big tree!!!  I love this photo, if has a lot in it, the car even has an AA sticker on the window, I wondered what would happen if we rang the AA for a tow!

Let's have a look at three different car buying options.
  1. Brand New Car, $43,990 purchase price, a Toyota Camry Hybrid (because I have one and love it).  I looked at the special deals offered, including finance, purchasing it with no deposit from the dealer.
  2. Second Hand Car, $13,920 recommended purchase price, a Holden Cruze Z-Series, 2014.  I looked at the special deals offered, purchasing it with no deposit from Turners Car Auctions.
  3. Second Hand Car, $5295 recommended purchase price, A Nissan Teana 2004.  I looked at the special deals offered, purchasing it with no deposit from Turners Car Auctions.
Three cars, three different prices.  Most of us would buy the third option and then work our way up the second, when we could afford it.   I did a little exercise with the true costs of these vehicles.  Thinking about how much they cost over the time we would own them.  Talking to a few people, my unscientific research tells me they would normally change or upgrade their car about once every five years.  Feel free to disagree but that seems about right.  

If we look at what happens in five years, if we do the same mileage in these three cars, we have financed them all and pay them off over that time, we buy registrations, WOFs, insurance, maintenance, tyres, petrol and service them as often as we should, what do they actually cost?  Have we ever thought of the true cost of a car?  My guess is NO we haven't!  

The internet can tell you absolutely anything about any of these vehicles, and the numbers are easy to find.  Some of the numbers I know from vehicles I have owned so after looking them up I did a bit of a "common sense" investigation to reassure myself they were as accurate as possible.  I am not perfect and predictions have a bit of a margin for error, but I did the best I could. 

The brand new car, also comes under the Consumer Guarantees Act, as per my previous blog, https://granniesarahssolutions.blogspot.com/2023/04/purchasing-extended-warranty-on-product.html

The total cost of the vehicles over the five year period, after reselling the car five years later are truly shocking!!  Feel free to do the numbers yourself as this is truly unbelievable!  You should be questioning them yourself, but this is the comparison of the three cars above. 

  1. The brand new car costs $26,538
  2. The middle of the road second hand car costs $54,123
  3. The cheapest second hand car costs $45,248
This is actually mindblowing and also shows us how "poverty mentality" keeps us from getting ahead. 

There are a few deciding factors with these vehicles, the first one is a hybrid so saves a lot in fuel and has a clean car discount and also only needs servicing half as often.  It also has a capped servicing deal offered with it at purchase and all parts are covered by the warranty.  The resale value is greater as it is only a five year old car.   WOF checks don't apply for the first two years, and registrations and insurance are both cheaper.  The finance deal offered with new cars is substantially cheaper than any offered for a second hand car.  

When we make any big purchase these are the types of questions we should ask ourselves.  Do the maths, it doesn't lie, make a decision based on facts, not on a heap of random assumptions by people with no idea.  Think about the ongoing costs, you will have to find that money from somewhere, it is never easy.

I hope this helps to stimulate your brain.  Feel free to comment, question, follow, share, or like my posts and/or my blog.  I am trying to get some different thought patterns out there so people can get ahead.  Have a go at doing the maths for your own situation.  

Buying dangerous, cheap second hand vehicles that continuously need work, is actually keeping the poor people poor.  I hope this helps you, see how you go.  Know that you are definitely good enough to investigate the options.

Have a wonderful day and know you are absolutely worth it!


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