Is a New Car worth the Price?

A good question, and one we shall examine in this article, but before we do that, let us look closely at how the automobile industry works. A car manufacturer has tremendous costs, and has a sale price for each vehicle. The cars are set aside for the dealerships that are associated with that particular make of car, so for argument’s sake, let’s talk about Toyota.

Storage space

The manufacturer will have areas for storing finished vehicles, and when a dealer receives an order, the car is located and transported to the dealer within a few days. With so many combinations of colour and options, there needs to be many cars at this hub, to ensure that any given specification can be promptly delivered.

The dealer

Before any company can sell Toyota cars, they must pass a rigorous testing period, to ensure that they are suitable to represent the manufacturer. Once they agreement has been made, the manufacturer will support the dealer in many ways, such as providing test drive vehicles and continued technical support for the vehicle maintenance.

The price

Obviously the dealer has a margin, which is fixed, and the sales person is the only one who can play with the final figure, if they are prepared to lose some of their commission. Once a price has been agreed, and finance is approved, the vehicle will be delivered, and the transaction completed. The new owner now has a new vehicle, although it isn’t classed as new anymore, as it is in fact being used by the first owner. This means an immediate price drop of at least 5%, which could be as high as 11% with some of the more expensive cars. This big drop is normal for all new vehicles, and is a painful reminder of how values can suddenly change.

Used cars

The market for used cars is huge, as there are a multitude of reasons why someone might sell their car. A family crisis could force the sale of a car that is only a few months old, or perhaps the owner doesn’t like the feel of the car, and decides to upgrade to something better. If owning a vehicle from day one is important to you, then perhaps new is the way to go, however, one can get the same vehicle much cheaper, if it has a few miles on the clock. There is a wide range of cars for sale in Canberra, and if you buy from a registered dealer, you can be sure the vehicle is in first class condition.

New Car worth the Price1

If price is a major consideration, a one year old car offers an identical vehicle that is at least 20% cheaper than its new counterpart. Second hand cars tend to hold their value for the first two years, so if you stay within that window, reselling will not result in big losses. New or old, both have their advantages, and to answer the question, is a new vehicle worth the price? The answer must be, to some people, yes.