6 Financial Benefits Of Owning A Pre-Owned Car In Malaysia

Old is still gold. Here's why owning a pre-owned car is definitely better than a new car.

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1. You're only paying a fraction of the price

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The interest rates on new cars do tend to be slightly lower than they are on used cars, however. Bankrate reports the average 48-month rates on new cars at 4%, while used car rates are slightly higher — at 4.99%. In spite of the higher rates, in most cases, you still end up with a much smaller total bill when you opt for a used vehicle.

Buying a new car is definitely more expensive than buying a used one. Unless you decide to lease, your initial costs on a new car will be hefty. Financial institutions typically require down payments of at least 10 percent on a new-car loan (but it helps to add more).

2. The value of a pre-owned car doesn't depreciate as fast as the value of a brand new car

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Cars lose value with each passing month and mile, but the steepest decline happens right away; some models can lose 40 percent or more of their value in the first year. With a used car, there’s no depreciation hit the second you roll off the lot. There’s also less mental depreciation, no need to worry about the first parking-lot ding or rock chip in the paint because chances are the car’s previous owner or owners took care of those for you.

3. Insurance is cheaper. Your wallet bleeds less monthly.

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Like financing, insurance rates will be affected by the age of a car, but in this case the used vehicle tends to be less expensive. A little bit of pre-purchase research will save you from insurance sticker shock, no matter which vehicle you choose.

Firstly, as soon as a car is purchased the owner must buy an insurance cover. If a used car is purchased, the new owner needs to know that the cover of the previous owner is null and void. This is true even if legal ownership transfer has not yet occurred at the Road Transport Department (RTD). The insured value - or sum insured - depends on the market value of a vehicle. Under-insurance or over-insurance can occur when this value is not determined properly. If the sum insured is less than the market value (under-insurance) the owner will only be partially compensated. If the sum insured is higher (over-insurance) the insurance company will only pay out the market value.

4. You get to choose the car you want especially if it's no longer in production!

Where else can you find a car that comes in size 12?

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If you buy a used car, as opposed to a new car, you have a much wider selection of inventory to choose from and you’re not limited to models that were released over the past year or two as you would be when buying new. You have a virtually endless supply of inventory to choose from.

5. Unnecessary fees and taxes don't add to the burden

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If you buy a car at the dealership — new or used — you’re probably going to have fees (like taxes) tacked on regardless to the condition of the vehicle. You may also see random other fees, like processing, preparation, and advertising fees, which can add up to a hundreds of dollars. If you buy a used car from a private party, however, you can avoid some of these random fees.

Remember that the insurance policy of a car is attached to the owner's name. An official transfer of ownership requires the buyer to purchase a new insurance policy to take over the car's coverage from the preceding one. For road tax, no such restrictions apply. If the previous owner had paid for the car's road tax, it remains valid until the stipulated expiry date.

6. You don't end up disenchanted like this guy

If you're not ready to add to your list of monthly commitments with a brand new car, get a pre-loved Volkswagen at a steal. Find out how here