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Should I Purchase a New or Used Car or Lease?

11 September 2021

Ultimately, the decision to purchase or lease your next car is a matter of personal preference and financial state. Whether you decide to purchase or lease, the decision is a significant financial undertaking. It should not be taken lightly or under any circumstances. It is important to make the following considerations in your decision-making.


1. Costs


If you are considering purchasing a new or used car, it is important to balance your financial status and budgetary needs against the vehicle costs. If the vehicle’s total purchase price (including warranties, additional features, etc.) is not going to be paid in full at the time of the purchase, it will be subjected to be financed. In order to not become financially overwhelmed, put down an adequate down payment to where the monthly instalment is a manageable amount.

If you are considering leasing as an alternative to purchasing, you may not have to worry about a large down payment; however, depending on how luxurious you decide to go in your vehicle selection, the monthly lease fee may be just as or more expensive than your purchase price.

Additionally, regardless of whether you choose to lease or purchase, maintenance expenses, including regular repair, replacement pieces, potential tire replacement, as well as annual inspection and registration, insurance, and oil changes are all expenses that should be taken into account when budgeting your vehicle expenses.


2. Reliability & Safety


Perhaps the important consideration should be the safety and reliability of the vehicle you decide to purchase or lease. Whether you consider yourself a regular or very frequent driver or do not drive much at all, you want to make sure that your vehicle will safely transport you and your loved ones to desired destinations without any issue.

Prior to making your vehicle selection, you should research the most trusted vehicle makes and models so that you have an idea as to what you are looking for. No matter how good condition a used car is maintained, the safety and reliability are compromised if the vehicle has been through collisions. Additionally, the lifeline of a used vehicle with excessive mileage is not likely to be reliable.

There are many used cars with minimal mileage that can provide comparable benefits to a new car. The main key is to give yourself plenty of time to do sufficient research prior to going to the automobile dealership. When you research, be sure to research prices and financing, safety functions, miles per gallon, reliability, durability, and any features you want in your vehicle.


3. Depreciation


Depreciation is the gradual loss of value of an asset over time. The cost of cars in Singapore is notoriously high. In fact, what makes it so expensive is the fact that any car's value decreases dramatically over a 10 year period, i.e. high depreciation.

A brand-new car will depreciate the most in the first year due to the steep drop. With a car that's just one year old, you avoid this first hit from depreciation and save a significant amount of money on a nearly new car. Additionally, the owner can save up to half of the car's original price by waiting past the three-year mark.

When you lease a car, you essentially pay for the depreciation, plus taxes and interest. Upon expiration of your lease, you can simply return the vehicle - you won't have to worry about selling it at a loss if its value has unexpectedly dropped.

When buying new, it is often easier to negotiate the initial purchase price, and new car loans come with the best rates. Plus, automakers may offer car-buying incentives to move new models. These incentives can significantly lower the sticker price. As a final benefit, you don't have to worry about a new car's condition, and new cars come with warranties, making them potentially easier and cheaper to maintain.

And ultimately, if you plan to drive your car until the wheels fall off, you’ll have used all of the car’s value, and depreciation won’t be as much of an issue.


4. How long must you wait for your car


A used car will be available right away, whereas new cars will require a waiting period. Make sure you ask the salesperson how long it will take you to receive your vehicle before you purchase one.


5. Buy Used as New is no longer Available


Should you buy a new or used vehicle? Current car shortages caused by the pandemic are affecting both the new and used car markets as well as the decision-making process when it comes to shopping.

The tight new car supply is having a ripple effect across the entire industry. As new car supplies dwindle and prices go up, consumers are driven to buying used cars, which are seeing record prices for both buyers and sellers.


If you are thinking to purchase a car and are unsure as to how to proceed, contact us today!

Hin Lung Auto’s qualified staff is available to help you every step of the way!

You may call our Customer Care now at: +65 6472 2222

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