We’ve probably heard this saying before:
“Buying brand new is only safe way to buy a vehicle”
Buying a brand-new car is a special moment that celebrates a certain milestone in one’s life.
This begs the question though, are new cars really the only option?
Let’s take a quick dive into the heart of the matter.
For those who are keen on buying a brand-new car, there are definitely several benefits to consider.
Let’s start with the obvious—you’re getting a vehicle in pristine condition.
You are guaranteed that your car has no dings, dents, and damages caused by accidents or mechanical failures.
Furthermore, its features are up-to-date with its market that year. Car warranties also come standard for the first 3-5 years for most brands.
Apart from the price tag that brand-new cars come with, here’s the kicker a lot of us are acquainted with.
Brand-new cars are known for their large depreciation rate.
Case-in-point, the minute after you drive your car off the showroom, around 9-11%. So if you purchased a vehicle with a PHP 1,000,000 price tag, it potentially depreciates PHP 90,000 - 110,000 on your first car ride alone.
And it doesn’t stop there.
Pundits claim that brand-new cars experience the steepest decline during the first 12 months since their initial value reduces by up to 20%.
However, for cars that tally more miles in their tank (for reference, the average Filipino driver logs in 10,000 km - 12,000 km in a car’s mileage annually), the depreciation rate could go as far as a staggering 25% in its first year!
From there, the car will only devalue by around 15% annually until it reaches the fifth-year mark, leaving you only with around 40% of its initial value from when you bought it.
Cosmetics aside, there’s a lot of back-and-forth that can happen from buying a brand-new vehicle. From a financial standpoint, you might want to consider a second hand car for an affordable purchase that gets you where you need to go.
Quality always comes with a price, and sometimes when you think you’re paying for something small at the moment, it ends up being more expensive in the long run.
If you make the smart purchase, pre-owned vehicles can offer almost the same utility as brand-new cars minus the exaggerated costs.
But if you are able to scout the right markets, such as the pre-owned vehicles being auctioned at JBAP, you may find yourself saving a buck while owning a car that is in good quality.
For more information or any questions on JBAP and second-hand vehicles visit https://jbap.com.ph/
