How Old Should A Used Car Be When You Buy It?

The age of a vehicle plays a pivotal role in its value and cost-effectiveness during the car-buying process. While some prefer the appeal of a brand-new car boasting the latest technology, others acknowledge the significant advantages of purchasing a pre-owned vehicle. That is, if you choose wisely. 

Have You Surpassed the Depreciation Threshold?

New cars typically undergo a depreciation of approximately 20% in their first year of ownership, followed by an additional 8% per year for the next four years, on average. Consequently, you can imagine how much a new car with a RM100,000 price tag would be worth after, say, 5 years. 

The rate of depreciation is greatly influenced by the demand of a certain car, with some models and makes being more resistant to value loss over time. Cars from most Japanese makes are a great example of cars that tend to hold their value.

As a general rule, if you’re after the best bang for your buck, it’s advisable to target a car that has already undergone the majority of its depreciation. This usually means looking for a car that is in the ‘sweet spot’ of at least two years old, but preferably between three and four years old.

This allows for a significant enough value reduction from its price when new, while also likely to have acceptably low levels of wear and tear to ensure a fairly trouble-free motoring experience under your ownership. Cars under 5 years old are also likely to still have their manufacturer’s warranty still intact. 

What Factors Influence Depreciation On A Used Car?

Various factors can impact a car’s depreciation, including the make and model, but also the after-sales infrastructure built up in a certain region or country. Toyotas and Hondas, renowned for their reliability, typically retain their value well, and this also applies more specifically to Malaysia by way of Perodua, which uses many Toyota parts and is also known for being reliable.

These cars are also backed by an efficient and widespread network of showrooms and service centres that can be relied on when something unexpected happens. 

However, additional considerations such as the used car's condition, previous usage circumstances, mileage, and local market demand also contribute to the rate of depreciation. Keep in mind that, though  you could become more informed about a used car if you buy it directly from the previous owner, you might not get the full picture about a certain car from a dealer lot. 

What Should I Consider Before Buying A Used Car?

First of all, it’s to do with your budget. New cars come with a higher price tag, yes, but offer the benefit of a warranty and the latest features. Conversely, used cars are often more budget-friendly, though they may lack warranty coverage and the latest features. Coming to terms with this trade-off is an important first step. 

Secondly, you’ll have to assess your specific essential requirements when choosing between a new or used car. If advanced features or the latest technology are a necessity, a new car may be the preferable choice. However, if you're working within a tight budget, a used car may offer a more practical option that satisfies all the other criteria. 

Should you come to a decision that a used car is your right for you, it’s always prudent to investigate the vehicle’s service history. Thoroughly reviewing the maintenance records of a prospective vehicle helps ensure it has been well-maintained, but often it takes a keen eye to accurately ascertain a car’s condition, so feel free to bring along someone more versed in cars and car maintenance (such a friend or, better yet, a mechanic) to accompany you to a viewing. 

As previously mentioned, before making a decision, it's advisable to check whether a used car still has any remaining warranty coverage or if an extended warranty can be purchased for added peace of mind.

A Better Way To Buy A Used Car

There’s certainly a good deal of ambiguity and risk associated with buying a used car, especially for the novice car buyer. However, CARSOME’s unique approach can help you avoid this stress and uncertainty altogether.

All vehicles certified by CARSOME undergo a rigorous 175-point inspection to ensure they haven't been tampered with in terms of mileage, haven't suffered major accidents, floods, or fires. Moreover, these cars come with transparent pricing and no hidden charges, offering a hassle-free buying experience where all necessary paperwork is handled for you.

Find your next ride and choose from thousands of vehicles in the comfort of your own home by visiting the CARSOME website (www.carsome.my) to explore a wide range of top-quality cars, some certified to be good as new. Alternatively, download the CARSOME app for iOS and Android today.