Brand New or Pre-Owned ?

[DonT]

After reading a lot of discussions here about getting a brand new and a second hand...I just figured out how about discussing or comparing the actual cost of ownership of a Brand New or Pre-Owned.

Brand New Vehicle
Initial Value - Php 1M
Maint/etc - Php 2,000 x 4times x 5 years = Php40K
Fuel - Php 4K/mo x 12 x 5 years = Php 240K
Value after 5 years - Php 500K
Cost of Ownership - 500K+240K+40K = Php780K

Pre-Owned (5yr old)
Initial Value - Php 500K
Maint/etc - Php 5,000 x 4times x 5 years = Php 100K
Fuel - Php 5.2K/mo x 12 x 5 years = Php 312K
Value after 5 yrs - Php 200K
Cost of Ownership - 300K+312K+100K = Php 712K

Based on my assumptions...it seems that I will only save around 68K (780-712K) in total by getting myself a Pre-owned one.

PS: of course we should not forget to also consider the 500K which I saved by buying a pre owned car. I could have placed it into an investment which can double in 5 yrs.

Please feel free to make comments. I may have made wrong assumptions or missed them.

[suv]

Im not sure sa jan sa computation pero depends din sa brand ng sasakyan

Kasi dito sa pinas pag bumili ka ng 2nd hand na nissan and mazda sedans tapos ibebenta ulit para maging 3rd and 4th owned na eh lalo pa babagsak ang price.

Unlike Honda and Toyota na stable ang price.

Tapos hindi ako bibili ng pre-owned na tinakbo every year eh 12,000 kms. May mga nababasa ako na binebenta kotse na ang tinakbo na in two years pa lang eh 30,000kms!!! (Babaratin na yan pag ganyan :bwahaha: )

Mga 5,000- 8000 kms lang dapat every year para hindi masyado laspag.

Nothing beats a brand new car......Kahit TaTa Nano pa yan...

[DonT]

Tapos hindi ako bibili ng pre-owned na tinakbo every year eh 12,000 kms. May mga nababasa ako na binebenta kotse na ang tinakbo na in two years pa lang eh 30,000kms!!! (Babaratin na yan pag ganyan :bwahaha: )

Mga 5,000- 8000 kms lang dapat every year para hindi masyado laspag.

Nothing beats a brand new car......Kahit TaTa Nano pa yan...

Thanks for the comment..actually the figure for Fuel was for the cost and not mileage..I corrected my post and inserted 'Php'. Sorry sir.

[vinj]

Depends also if you're paying cash or financing and how old exactly is the pre-owned. When we buy 2nd hand we get a 1-3 year old model which hardly needs any repairs (just some preventive maintenance so the car is good to go at 200K-400K less than the showroom price.

[Djerms]

I want brand new pero for people like me na wala naman malaking budget and may knowledge naman about cars, 2nd hand is the way to go. Madaming madaling magsawa dyan, sandali lang nagamit, benta kaagad.

[mbeige]

Getting a pre-owned (used) car is more practical if and only if you know what you're looking for, and that troublespots the vehicle has acquired through the years have been taken care of. It's just as important that you know the maintenance history of the said vehicle. Other than that the only downside is the larger cost up front (pay by cash, etc) compared to buying new with downpayment that's easier on the wallet. Of course, finding the right car is another matter. But at least during your "hunt" you can experience various states of ownership/repair that you can also add to your list when scrutinizing the cars you want to buy.

Edit: For those of us based in the US where credit history and score are important, buying a new car adds up to that and can become an opportunity for you to still increase your score if you have a very stable job and can pay the bills on time. If your credit score is bad then that's one more thing to consider.

[Bry]

Best thing to do is buy a one (1) to two (2) year old car. Malaki na ang mura versus brand new, pero the condition is still very good.

[KBR]

Getting a pre-owned (used) car is more practical if and only if you know what you're looking for, and that troublespots the vehicle has acquired through the years have been taken care of. It's just as important that you know the maintenance history of the said vehicle. Other than that the only downside is the larger cost up front (pay by cash, etc) compared to buying new with downpayment that's easier on the wallet. Of course, finding the right car is another matter. But at least during your "hunt" you can experience various states of ownership/repair that you can also add to your list when scrutinizing the cars you want to buy.

Edit: For those of us based in the US where credit history and score are important, buying a new car adds up to that and can become an opportunity for you to still increase your score if you have a very stable job and can pay the bills on time. If your credit score is bad then that's one more thing to consider.

I agree with ya bro, buying a brand new car here in the US is pretty easy as long as you have a stable job (at least 1-3 yrs. on your current job, have a bank account, and can afford the monthly payments). also, buying a new car can help you build your credit score.

but then, aside from having such opportunities and if you are practical and in a budget, you still have an option to buy a pre-owned vehicle (it dont matter how old it is.. it could be a 2,5,10 yrs old car.. or even a 6 months old car), and if you dont have the cash to pay up front, you can still get it financed (from the Used Car Dealership or even through your Bank) and get the car almost 10-20%.. even 50% less than how much the car is supposed to cost when bought brand new.

anywayz, for me though, I dont mind buying a Pre-Owned vehicle.. as long as I like the car and it has a Clean California Title. the body & interior is clean and has a well maintained engine / drivetrain. and even with high mileage, I'd still get it... and thats for me though, not my wifey. since she gets everything Brand Spanking NEW! lolz!


aite, peace.

[DonT]

Thanks for your input guys. Looks like the guys who knows more about vehicles buy pre-owned ones...

Or the guys who prefer Bnew are just not bothering to post.

[_Qwerty_]

*Dont - bakit yung sa computation mo, mas mataas yung fuel computation nung pre-owned?

[DonT]

*Dont - bakit yung sa computation mo, mas mataas yung fuel computation nung pre-owned?

I just assumed that a 5yr old car would consume 30% more fuel than a bnew one. Although overly exagerrated yan. In a span of 5 years..that only amounts to Php 72K.

[orly_andico]

i think the figure of 100K for maintenance over 5 years is unrealistic.

on my admittedly 10-year old at the time car, maintenance was more like 30k a year.

[MXFX]

i noticed that fuel cost thingy as well. i guess it is very hard to assume costs since there are so many variables on the topic.

wife and i bought new cars after finding really good deals and knowing that this is not an investment (i.e. losing a lot on the first few years). for my wife's car, we tried a few used options but didnt worked out. the financing deals made a big difference in our decision as well.

a few days ago, i helped a friend buy a slightly used sedan. we thought the same way. it was an 07 with some miles, immaculate condition, and about $6k off a new one. even after driving a few new models, in his case he bought the best car for his budget.

[shadow]

if you have the money then buy a brand new car if not then settle for a second hand...

[pup2]

I want brand new pero for people like me na wala naman malaking budget and may knowledge naman about cars, 2nd hand is the way to go. Madaming madaling magsawa dyan, sandali lang nagamit, benta kaagad.

I agree with you. Plus, there are always advantages to being able to change cars every year or two -- huwag ka lang maloko. Tsaka bakit parang footnote lang yung 500K difference sa acquisition price? EH ang laki nun compared to TCO. Finally, I believe a well-maintained older car will have the same if not better FC than a new one lalo na on its first year -- sabi kasi ni Niky eh. hehe.

[OTEP]

The '95 Vitara costs Php280k (makinis na example) second hand last year.
Repairs were Php20,000 (heavy service including timing belt and power steering service). Figure another Php6k for the a/c servicing and about 10k for other odds and ends (e.g. clutch, clutch cable, etc.).

Now its a solid, reliable 4x4 SUV (also spent around Php7k for a body lift).

Compare that to the Picanto which was acquired brand new (125k initial cash out, Php10k monthly for 5 years).

Now there are no more expenses for the Vitara other than fuel and preventive maintenance (done by the trusted mechanic). For the Picanto, it's still Php10k/month plus casa maintenance on a small econohatch which doesn't do a lot (can't go off-road, small space). The Vitara is full spec with alloy wheels, all power features, etc to boot.

I dunno, pre-owned still makes a lot of sense to me. Or I just like the thrill of the hunt vs the boring dealership experience.

[1D4LV]

The '95 Vitara costs Php280k (makinis na example) second hand last year.
Repairs were Php20,000 (heavy service including timing belt and power steering service). Figure another Php6k for the a/c servicing and about 10k for other odds and ends (e.g. clutch, clutch cable, etc.).

Now its a solid, reliable 4x4 SUV (also spent around Php7k for a body lift).

Compare that to the Picanto which was acquired brand new (125k initial cash out, Php10k monthly for 5 years).

Now there are no more expenses for the Vitara other than fuel and preventive maintenance (done by the trusted mechanic). For the Picanto, it's still Php10k/month plus casa maintenance on a small econohatch which doesn't do a lot (can't go off-road, small space). The Vitara is full spec with alloy wheels, all power features, etc to boot.

I dunno, pre-owned still makes a lot of sense to me. Or I just like the thrill of the hunt vs the boring dealership experience.

i agree with you fafi. actually, this was the deciding factor why i decided in not getting a new unit this year. why? my car is still in its excellent running condition. onting pagawa lang sa suspension tsaka onting dent repair lang, ayus na. all in all, i will not spend 10k for these repairs for this year. kung may lalabas pang ibang sira, hindi na ako gagastos ng more than 30k for the year (maintenance included). and after i computed my MA if i get a new one, its around 9k/month or 108k for this year only. so that means, even though i spend around 20k more for accessories, mas mataas pa din yung expenses ko if i am to get a new one than to use and maintain and improve my current ride. siguro ang gagawin ko is i will just retain my current unit, until the cost of maintenance is greater than the cost of my MA.

sino ba nagpoint out neto sa akin? si niki ata o si m2. pero one of them did pointed this out to me. and i am sure i made the right decision.

[mazingerZ]

Siguro its the thrill (ika nga ni doc otep) of hunting for good units, plus the overall experience of knowing the illnesses of the car and curing these.

For me, I bought my rig (zuk vit) for only P150k. Dami ko ring ginastos mga P70k na total. Pero in good running condition na ang beloved TARTAR ko. My friend in buy and sell wants to sell the car at P280k daw. SAbi ko wag na lang, at least maski luma to kabisado ko na ang mga depekto. Kaysa sa mag-umpisa uli sa zero.

And besides, I don't have the money to shell out for the humungous insurance premiums for brand new cars plus the exorbitant casa pms charges.

Well, if you can afford the charges which eminate from having a brand new car then by all means go for it. Some say nothing beats the smell of a brand new car's interior, pero for me, nothing beats the smell of my ionizer in my car

[meledson]

I just assumed that a 5yr old car would consume 30% more fuel than a bnew one. Although overly exagerrated yan. In a span of 5 years..that only amounts to Php 72K.

We got a 2nd hand 1.6E A/T Altis, for a low price (hulugan pa). Odometer is 77,000 Km+ brought Nov. 2001, but it is a 2002 model. FC is still good at 13.xx Km per liter. Suspension seems to be OK but I think I have to replace the shock bushings. It have a couple of dents and scrapes. But is is still a good car for it's age. Casa maintained till 66K. The maintenance record book is with the car.

For the 80K PM it will be quite expensive for me. Change oil, oil filter, change ATF, change brake fluid, change power steering, chenge belts (?), spark plugs, etc. I do not have an estimate yet. I am estimating to be around 10K to 20K. I was able to see the service record and test drive the car. It is still quite a good shape for it's age.

On the other hand, we have a new Avanza aquired Aug of last year. maintenance cost is relatively cheap. Total maintenance cost is about PHP 6K since we got it. It is now at almost have 14,000 Km

Getting the service record and a car's history can be tedious if not available. You buy the 2nd hand car "as-is-where-is" usually with no warranties.

pre-owned cars with out manufacturer's warranty can be brought to any "trusted" mechanic. Warrantied vehicles have to deal with the Casa or else, void the warranty.

We can play around with just about any thing with a vehicle that is out of warranty. Upgrades, engine modifications, suspension upgrades, etc. with brand new vehicles, most probably not.

[orly_andico]

A used car is almost always a better buy, provided you know the car's history.

For me --- our old Mazda 626 is now on it's 15th year. We've had it for 5 years (it was already elderly when we bought it... but that was the budget then) and has had a host of problems.

Things finally got to the point that getting a new car was overwhelmingly tempting -- no need to worry about something breaking unexpectedly. But, the drawback is, huge monthly amortization.

Now, if things turn out right, we might be able to buy another car. But -- this time, since we have a new one that's working perfectly, I can no longer justify taking on more debt just for an alternate / coding car. So I will spend the equivalent of 2-3 months worth of amortization and have everything broken on the 626 repaired.

In summary -- if you don't have a car, a used car of dubious provenance is scary, since it will be your only car and you'll be crippled without it. In that case, a new one is probably better (and much lower cash out).

But if you have an old-ish car that can still be maintained, and isn't giving you too many headaches, stick with it.

One thing I notice is that a lot of first-time car buyers of limited financial circumstances (like myself, before..) buy a cheap car. And it's cheap because it's got lots wrong with it. Then they get a really bad ownership experience. Mine wasn't so bad -- the 10-year old car started getting really problematic only after 3-4 years of ownership. But still, something to consider.