New vs Second Hand - Which is better

[Arnold]

So long as you buy well, generally new is better than second hand notwithstanding what is said about car values after being driven off the lot. A lot of that is only true if paying RRP and asking the dealer what they would give you for it the next day.

Say you had $40k for new wheels, you could buy either, say:

A five-year-old BMW worth $38800 + stamp duty or negotiate to buy a $45000 Golf.

When you buy new, you can negotiate a discount on the price (although that's becoming a thing of the past).

When buying second hand, unless you snag an absolute bargain (like when I am selling you a car), the car you bought is only worth what the "bidder" below you would have paid, which might only be $38000, so you pay market price, and some, for a second hand car, but can get a discount on a new car.

Consider which car wins on each aspect of car ownership:

Which car is better for...

2018 BMW wins on:
Status
Luxury & Comfort
Ride & Handling
NVH
Magnetism
Safety & Technology❓

2023 Golf wins on:
Discount on market value
Depreciation
Running costs
Maintenance costs
Peace of mind
Risk of major failure
Useful life
Warranty
Safety & Technology❓

People buying a five-year-old Bimmer for $38800 often think they are buying an $83000 car for half price when they are really buying a $38000 car at full price and often, a whole bowl of trouble. They never allow for the price the car might have actually sold for new, amplifying the size of the saving in their minds.

People think the savings on demos are bigger than they are because they compare the demo price with the RRP of the same car, not what they could have bought it for. It makes them happier to think they saved $7k instead of $3k. I would not want last year's model with 10000km on the clock if I could get brand new for $3000 more.

A mate bought a 2003 325i when I bought my 2008 GTI and while my Golf is going strong, his Bimmer is long, long gone and that is after he had to spend $8k on the engine.

If it is high tech or has moving parts, buying second hand is very often a false economy as the item has to be replaced sooner and costs more in maintenance while running less efficiently and being less high tech. More frequent replacements cost time and money. And risk if buying second hand.

Buying new, either sell after 2-3 or 4-5 years (ie just inside warranty for decent cars) or drive it into the ground. I choose the latter, although Euro cars can start getting expensive to repair after 7-10 years. You just gotta push through : )

Unless you have a your heart set on something that you simply could not afford new, buying a second hand car makes about as much sense as buying a second hand computer.

[Standby for the hot negotiators to chime in with their unusual stories of second hand bargains. They're legit.]

That is all I had to say on the matter, so far, except please disregard the foregoing if you or yours is in the market for an immaculate 2008 GTI manual in Reflex Silver with roof & leather and 110000km on the clock...

[Sharkie]

In reality, you are comparing apples with pears above. Without knowing what models of the BMW and Golf you are looking at, its impossible to give some advice.

A few general things to consider ...

A 2018 3 series BMW was built in South Africa and a 2023 Golf is built in Germany .... quality control from new is/was therefore not at the same level to start with.
Any 2018 car has 6 year old bushes, hoses, brakes and suspension, all of which will need attention in the next few years.
Tech in a 2018 car is old compared to a new car, a new VW is full of nice new infotech and a 2018 BMW feels positively old in that regards.
Any car from 2018 with a 5 star ANCAP rating will struggle to get 3 stars today ... safety tech has moved a long way in just 6 years.

I think you had it here ... "Unless you have a your heart set on something that you simply could not afford new, buying a second hand car makes about as much sense as buying a second hand computer". Unless it is really collectable, like a 1990 325is manual for instance (or a E93 V8 M3!), you should keep walking past towards the new car showroom.

[Arnold]

That's correct: I am comparing one possible place to invest $40000 using an example of the make of car one can acquire for $40000 with an example of what one can acquire new for $40,000. The make does not really matter.

Substitute whatever mainstream car you like for the second hand one and the new one.

[whichonetoget]

You're paying a premium for fuss free motoring by buying new.

That said, some models depreciate faster than others, so you could arguably get much better 'bang for buck' by going with a well sorted 5 year old car for the same price.

Using your GTI example. If in 2012, I purchased a loaded MK6 GTI for $45k, I probably be able to get an 02/03 E46 M3 for similar money at that time. I know which one I'd rather have.

[Sharkie]

Using your GTI example. If in 2012, I purchased a loaded MK6 GTI for $45k, I probably be able to get an 02/03 E46 M3 for similar money at that time. I know which one I'd rather have.

I used to have an E46 M3, loved every minute of it. Would I ever buy a 10yr old M3 (or any E46 M3 today) .... never under any circumstances. They are horrendously expensive to maintain beyond the 5 year mark. VANOS goes on a E36/E46 M3 (its like a DQ200, not a matter of if but when) and you are up for $10K in repairs. So in 2012, a 2003 M3 would have been a pass for me.