Most people pay between RM300 to RM600 a month on average for a seven-year loan on a used car. Compare this to the monthly instalments of RM1,000 and above that folks pay for a brand new car.
That’s over RM6,000 a year in savings if you’ve bought a vehicle priced at RM60,000. This in turn is the equivalent of 10 years’ payments.
In contrast, if you can buy a used vehicle that is less than 10 years old for under RM30,000, and which has clocked-in at less than 100,000 km, it’s a steal.
Forget the bells and whistles you get on new vehicles, you can always outfit used cars with gadgets you really want. By going the used-car route, you save yourself the massive depreciation costs that come with the first few years of the car’s life.
You can also get a much better make (think Toyota, Honda or better) at a lower price, not to mention the joy of being able to change your car more often without it causing too much of a dent on your wallet.
All the savings you enjoy from buying a used car instead of a brand new one, can either be deposited in a savings account or used few years down the line to purchase another used car.
In the long run, you’d have spent less money on a used car than on a new car once you factor in interest rates as well.
Getting the best buck on your car
It is important you know how to do your research if you’re thinking of buying a used car. Sites like VinCheck.info apply to those in the US while MyCarInfo.com.my is for local consumption.
Here are a few things you should look into.
1. Set yourself parameters. The sweet spot is between 50,000 and 100,000 km in terms of mileage, with a few outliers depending on specific vehicles.
At about 100,000 km, belts and brake cylinders go out, tires need changing, water pumps go out, and a bunch of other nickel-and-dime charges that’ll cost you on average RM500 to RM1,000 per repair/replacement.
These costs are still ultimately less than your monthly expenses if you’re financing. It’s a gamble as to whether or not you’ll have to pay them in a given month.
Still, knowing what you’re in for helps you narrow your expenses down.
2. Put a potential new vehicle through its paces. What you want to do is give yourself a spread of potential vehicles to consider. Do an online search about the makes and models you like and investigate the issues and common errors associated with these makes.
Once you’ve done that, go into a meeting with the seller armed with all this information. Do a walk around and test drive the car without the radio on.
Pop the hood, pop the trunk, get down on your hands and knees to look at the undercarriage and check for any substantial rust.
3. Test drive the vehicle. Work all the windows and mirrors. Repeatedly. Test the brakes (not too vigorously now).
Put the vehicle in drive, put it in reverse, put it in neutral, listen to the gears shifting, and note any delays. The longer the delays, the worse the transmission – which can be a big cost.
4. Pay attention to the engine. Be alert for any odours when you run the engine, and look to see if anything leaks. After you take it on a test drive, test the oil.
Don’t worry if the person selling the vehicle gets nervous, that just means you can under-cut him on the price, and use your savings to fix whatever problem he’s trying to hide.
5. Lastly, ask about the history of the vehicle – why exactly is it being sold? This will tell you a lot about the unit, and whether it’s right for you.
There are a lot of things to consider as you go about buying a used car, but it’s a wise decision to make. Just be sure you carefully examine potential choices and check out a few before you drop the cash.
This article first appeared in https://mypf.my
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