Some people say that buying a used car will just give you a headache because you’ll never know the real condition of the car until you already have it. In reality, getting a used car could be a better choice than a new one.
Buying a used car like for example the popular toyota vios in Thailand entails doing good research about the seller and the vehicle you are buying. And “good research” involves conducting actual inspections and test driving of the car by you or a trusted mechanic.
If you did the necessities before making a purchase decision, you could be in for a great deal. With that, you could enjoy the benefits of getting a used car.
Top 5 Reasons Buying a Used Car in Thailand
1. Buying a used car gives you big savings
On average, used car prices are typically 50 percent lower than new cars. This is a fact in Thailand, despite having many car manufacturers in the country which lowers the actual cost of the locally-manufactured vehicles. This is already big savings especially for average-income households.
Imagine if you don’t have readily available cash to buy a car but you really need it for you and your family’s daily transportation needs. You may have already thought about borrowing money from a bank or a local dealer. If you do that, the interest expense and VAT for the 50 percent difference in the price could mean a hefty amount of extra monthly expenses.
To give you a price reference, let’s take the Corolla Altis which is a popular car in the country. The new model could cost between ฿840,000 to ฿1.1 Million. But you could get a used unit for about ฿350,000 to ฿500,000. The price difference is huge, and so is the interest and VAT that you could expect to pay if you buy the never been used unit.
Additionally, buying a used car allows you to buy an expensive car within your budget. So if you are eyeing a luxury vehicle but you can’t afford this year’s model, check out a used car that is two to three years older. Generally, car makers do not redesign their models every year, so the style differences and features may not be that significant.
2. Lesser depreciation
Depreciation pertains to the difference between the price of a brand new car versus a used car. The price difference is typically attributed to the wear and tear and mileage of the car.
Apart from the usual wear and tear and mileage, there are other causes of car depreciation especially for brand new units.
- Change in status from new to used – It’s amazing how much the change of word from new to used could easily change the value of the car. As soon as you drive off with your newly purchased car, it becomes a used car. And that means losing several thousands of car values.
- Newer models coming up – When you buy your new car, the next model could just be peeking around the corner, if it is not already out. With newer gadgets and features on the latest model, they will reduce the value of the older models.
So new cars quickly depreciate as soon as they leave the seller’s premises, generally dropping by at least 10 percent. This means that if you are getting an ฿840,000 worth car, it will only be worth ฿756,000 once you start driving it home.
Looking at the numbers, the ฿840,000 is the retail price, while the ฿756,000 is now the value of the car. Should you decide to sell it back to the dealer, the present value will be the amount the dealer will be looking at.
Your new ride will continue to depreciate fast in the first few years of ownership. Some models even lose up to 40 percent of their value in the first year alone.
With used cars, the bulk depreciation already happened, so they depreciate at a much lower rate. Sometimes, the car may even gain value with some improvements or an overhaul.
3. Lower insurance cost
Depending on the model of the car you are buying, the insurance rate may be much lower for a used car than a new one. One reason for this is that a used car does not cost as much as a new car to replace in case of an accident. Generally, the insurance will only pay for what the car is worth at the time.
Since insurance is common and it is required by the government, having a used car translates to more savings in yearly insurance cost.
4. Good for the environment
One important tenet of environment-friendly living is adopting the philosophy to reduce, reuse and recycle. And buying a used car fits into this philosophy.
Moreover, even with the advances in technology that makes cars with better energy ratings and lower carbon emissions, some models of used cars are fuel efficient too. They may even be actually more efficient than new cars.
5. VAT savings
When you buy a new car, you’ll be paying 7% VAT on your purchase. The same is true if you are buying a used car from a dealership. Let’s take the example of the ฿840,000 brand new car versus the same used car that costs ฿420,000. Compute 7% VAT on the price difference and you are getting a savings of almost ฿30,000. This is a huge amount of money which makes buying a used car a better deal.
Buying a new car gives you an assurance of getting a car that is in perfect working condition (unless the car has some factory defects). And this is what some car buyers are after. However, you can also get a perfectly working used car. And if you do so, that is when you can say that buying used is a better choice.
Indeed, there are many forms of savings you can get from buying a used car. And these savings are worth considering when you are deciding on whether to buy new or to buy used.