It's the eternal car buyer's dilemma: shiny new with that new car smell, or gently used with thousands saved? Here's how to actually decide.
The Quick Answer
Buy new if: Warranty peace of mind matters most, you're keeping it 7+ years, you want specific specs, or the new model has significant improvements.
Buy used if: Value is the priority, you're okay with minor compromises, you want to avoid worst depreciation, or the model hasn't changed much.
Now let's look at why.
The Real Cost Difference
Depreciation: The Silent Killer
This is the biggest factor most people ignore.
New car depreciation (typical):
- Year 1: 15-25% loss
- Year 2: Additional 10-15%
- Year 3: Additional 8-12%
- After 5 years: Lost 50-60% of value
Example: $50,000 new car
- After 1 year: Worth ~$40,000
- After 3 years: Worth ~$30,000
- After 5 years: Worth ~$22,000
You just paid $28,000 to drive a car for 5 years (before fuel, insurance, rego, maintenance).
The Used Car Sweet Spot
Buy a 2-3 year old car and let someone else absorb that first hit:
Same car, bought 3 years old at $30,000:
- After your 5 years (car now 8 years old): Worth ~$15,000
- You paid $15,000 to drive it for 5 years
That's $13,000 saved. Real money.
But Wait—Interest Rates
New cars often get cheaper finance:
| New Car | Used Car | |
|---|---|---|
| Purchase price | $50,000 | $30,000 |
| Interest rate | 5.9% | 8.9% |
| Loan term | 5 years | 5 years |
| Total interest | $7,800 | $7,100 |
| Total cost | $57,800 | $37,100 |
Even with higher rates, used still wins on total cost.
New Car Advantages
1. Full Warranty
Modern new car warranties are impressive:
- 5-7 years on most brands
- Unlimited km (usually)
- Roadside assist included
- Peace of mind
Worth it if: You're risk-averse, not mechanically minded, or keeping it long-term.
2. Latest Safety Technology
New models often have:
- More airbags
- Better crash structures
- Advanced driver assistance
- Updated tech
Worth it if: Safety is paramount, especially for family vehicles.
3. Exact Specifications
Order exactly what you want:
- Preferred colour
- Option packages
- No compromises
Worth it if: You're particular about specifications.
4. No History Worries
You know exactly how it's been treated:
- No mystery previous owners
- No hidden damage
- Run-in period under your control
5. Better Finance Deals
Manufacturers subsidise new car finance:
- Lower interest rates
- Special offers
- Cashback deals
Used Car Advantages
1. Massive Savings
The numbers speak for themselves:
- 30-50% less than new for 2-3 year old vehicle
- Money saved can go toward other things
- Or buy a higher spec than you could afford new
2. Known Reliability
3-year-old car has:
- Known issues documented online
- Recalls already addressed
- Real-world reliability proven
- Reviews from actual owners, not automotive journalists
New model? You're the test market.
3. Lower Insurance
Cheaper car = cheaper comprehensive insurance.
Typical savings: $300-$800/year
4. Less Painful Dings
First scratch on a new car? Devastating. First scratch on a used car? Barely notice.
Psychological value: Underrated but real.
5. More Car for Your Money
$40,000 budget:
- New: Base model RAV4
- Used (3 years old): Fully loaded RAV4 or step up to Prado
When New Makes Sense
Scenario 1: Major Model Updates
When a complete redesign brings:
- Significantly better safety
- Much improved efficiency
- New tech you actually want
Example: 2022+ Toyota LandCruiser 300 vs 200 Series—major changes worth considering new.
Scenario 2: Long-Term Ownership
If you're keeping it 8-10+ years:
- Warranty covers critical early years
- Total depreciation hit is smaller as percentage
- You'll drive it most of its life
Scenario 3: Specific Requirements
When you need exact specs:
- Mining company requirements
- Disability modifications
- Towing packages
- Fleet compliance
Scenario 4: Very Reliable Vehicles
Some vehicles barely depreciate:
- Toyota LandCruiser
- Toyota HiLux (SR5+)
- Porsche 911
When new-to-used price difference is small, new makes more sense.
When Used Makes Sense
Scenario 1: Value Is Priority
Most buyers, honestly. The depreciation maths favour used in almost every situation.
Scenario 2: Model Unchanged
When little has changed between years:
- Same engine
- Same safety rating
- Cosmetic tweaks only
Example: Many ute generations run 3-4 years unchanged.
Scenario 3: First Car / Learning
Don't practice on expensive:
- You'll make mistakes
- Parking dings happen
- Insurance is cheaper
Scenario 4: High-Km Drivers
Drive 30,000+ km/year?
- Warranty runs out in 2-3 years anyway
- Used car already has km on it
- Makes no difference long-term
The Hybrid Approach
Consider:
Demo vehicles - Few thousand km, significant discount, full warranty Near-new used - 6-12 months old, one owner, 10,000-15,000 km
Best of both worlds for many buyers.
CQ Market Specifics
In Central Queensland:
New car advantage: Better dealer support, warranty service locally available.
Used car advantage: Many quality used vehicles from mining fleet turnover, interstate buying opens huge market.
Our observation: Most CQ buyers get better value from quality used vehicles. The new car premium is rarely justified unless you're keeping it 7+ years.
Making Your Decision
Ask yourself:
- How long will I keep it? (Longer = new makes more sense)
- How many km/year? (More = used makes more sense)
- How risk-tolerant am I? (Less = new makes more sense)
- What's my real budget? (Stretched = used makes more sense)
- Does the new model offer significant improvements?
We Can Help Either Way
Whether you're buying new or used, we can:
New cars: Negotiate with dealers, access fleet pricing, handle the paperwork.
Used cars: Search Australia-wide, inspect, negotiate, deliver.
Tell us what you're looking for and we'll give you honest advice on new vs used for your specific situation.
