The used car market has recently reported a significant uptick in sales and prices. While some always buy second-hand on principle, the current increase in sales may be attributed to issues with the delivery of new models. Global issues with supply chains, especially the shortage of computer chips have seriously affected motor vehicle production in multiple factories. The result is long wait lists for buyers here in Australia and new car dealers with order books bulging but unable to deliver.
Unable to secure a brand new vehicle, buyers may turn to the second-hand market to upgrade or replace their current vehicle. A significant increase in the price of used cars has been widely noted which may be reflecting the increase in demand. These are matters that buyers will be considering when it comes time for that next vehicle purchase. Also of great consideration will of course be finance. Specifically, what, if any, upsides, downsides and differences exist between new and used car loans.
If considering buying used, these used car finance options, tips and hints from Jade Car Loans may assist both private and business buyers. We provide finance for both the used and the new car market for both business vehicle and private car buyers. In this piece, we cover several points for used vehicle buyers to consider about the buying decision and the finances available.
Used v New: The ‘No-Winner’ Debate
Start the conversation over which is the best way to go – buy new or second-hand, and in many instances, there will be no reaching consensus. Everyone has their point of view and there is solid reasoning behind both.
Many great quality vehicles are available on the second-hand market. There are organisations and companies, such as government departments and hire car businesses, that upgrade their fleet at scheduled times regardless of mileage and condition. Some of these are low mileage, late models and have been well-maintained. But you may find these rather basic models without a lot of the bells and whistles you may personally select for your car. Some of these may be able to be added after purchase, so they keep that in mind.
New vehicles have extensive warranties which can significantly reduce the maintenance and service costs over time. Warranties seem to be a competitive battleground for some manufacturers, always increasing the offer. But it would depend on the actual warranty detail as to how attractive it is.
Many used car dealers also offer warranties and the warranty should go with the vehicle not the buyer. So when buying a late model used vehicle part of the warranty may still be valid.
Of course, due diligence is required when buying a used car. Referring to some of the popular motor vehicle platforms for comments and tips may be helpful, especially about some specific makes and models.
When buying a second hand electric vehicle, it is particularly advised to check the battery. The battery may age as do normal batteries and may not provide the range you are expecting.
Buying Used Cars Online
Stuck in lockdown with many new car dealerships closed, buyers have had to turn to online resources and tools to make their vehicle purchases. While many new car dealers have pivoted to a click ‘n collect format, without the opportunity to see and test drive the new model, it may seem a safer bet to opt for the second-hand model which you may be more familiar with.
Many used car dealers offer online purchasing and some a service to bring the vehicle to the home for the prospective buyer to inspect.
Buying online from a private seller is another story and one that should be approached with care and caution. The ACCC’s Scamwatch has been reporting a rise in scams and fraud around online car sales. Privately purchased used cars can be cheaper than through a dealer as dealers will have trade-in stock and then add on their margin. If a private seller is particularly keen to sell they may also be open to serious negotiations on price.
When engaging Jade Car Loans as your lender, our consultants can assist greatly with used car purchases. We have the resources to check IDs, verify vehicle ownership through records and check PPSR to ensure the vehicle is not under finance.
Used Car Finance
We provide finance for used vehicles with our portfolio of loan types:
- Secured Car Loan for Private Buyers
- Chattel Mortgage
- Commercial Hire Purchase
It should be noted that business car loan interest rates advertised by ourselves and other lenders are for new goods. Our better interest rates can be achieved for used cars, depending on the vehicle and the quality of the application.
Lenders will take into account the age and condition of the vehicle when making a loan offer. Specifically, this assessment may relate to the market book value compared with the price paid and/or loan amount requested. In some instances where the loan amount is seen as above the value, the lender may request a lesser loan amount for the loan to be approved. This can easily be achieved through the buyer paying a deposit to reduce the amount requested.
The principle is simple – buyers don’t want to owe more on the loan than the vehicle is worth. This can be particularly relevant when it is time to sell if that timing is before the end of the loan term.
When seeking finance for a used vehicle, be mindful of the detail in loan offers from used vehicle dealers. The car might be cheap but the finances are expensive. The seller may be hiding the profit waived in the vehicle price and gaining it in the finance deal.
We have accreditation with a large number of banks and non-bank lenders and source the cheapest loan offer from a vast section of the market. Buying a used car can be a smart decision but make sure you do your homework and if made a loan offer from the seller, contact us for a quote to at least compare. Alternatively, contact us for pre-approved finance before discussions with the seller.
Contact Jade Car Loans at 1300 000 003 to discuss used car finance
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.