New or used: What's the right car for you?

Australia is an automotive nation. Home of the Holden, friends of the Ford, territory of the Toyota: we love our vehicles. But do we know how to buy them? Check out our quick guide to buying a new car versus a used one.


Buying a new car reached all-time highs in 20231, and for good reason: Businesses that purchase a new car can generally claim the depreciation come tax time, while consumers may simply want to buy something that is more reliable, more modern, and has more advanced features. For some vehicles, the improvements in fuel efficiency and safety could potentially be worth the premium you pay for a newer model.

However, you should remember that a new car will rapidly depreciate in value - by up to 20 percent in the first year by some estimates2. Some makes and models hold their value more readily, but unless you manage to buy a future collector's item (and keep it in good condition), you may find that your vehicle is worth a lot less in a short amount of time.


Depreciation is one of the reasons why used cars can be more affordable than new ones. Used cars aren't always 20-year-old clunkers: they can be almost factory-fresh and still have lost a significant chunk of their original value. Savvy used-car buyers could aim for these more modern used vehicles, as they may still have their manufacturer's warranty, providing some comfort around the condition and reliability of the vehicle.

However, not every used car you find is going to be this close to new, and used cars may not be covered under the manufacturer's warranty. Despite this, you may still eligible for a statutory warranty if you buy a used car from a dealership, as long as it meets certain age and mileage requirements. This affords you protection even for a used vehicle, but make sure to check the  law in your state or territory regarding this to ensure you know whether your vehicle is protected by statutory warranty and what that warranty covers.

Whether you are buying new or used, it is important to ensure that you are spending your car loan wisely. If a deal seems too good to be true, then it could very well be, and buying from a private seller doesn't grant you the protections that buying from a dealership does - hence why it is often less expensive.

Always do your research, shop around between multiple dealers if possible and make sure you know the pros and cons of each make, model, age and mileage. This gives you the best chance to avoid the lemons and make the most of your money.

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1 Federal Chamber of Automotives Industries

2 Choice, Car depreciation

Important Information

This article has been prepared by IMB Bank and contains general information only. It is not intended to be relied on as advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal,  financial, taxation or other professional advice before you make any decisions about your business. Consider the relevant Terms and Conditions or Product Disclosure Statement and Target Market Determination available here before deciding whether to acquire any products or services offered by IMB Bank. Lending criteria, terms and conditions, fees and charges apply to IMB loan products.

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