Ask Manny: The Motoring Ed

This week’s question:

There are so many nice new hatchbacks now that are in the P500,000-P600,000 price range. While they are very attractive and give great value for money, I’m still hesitant when I imagine my family and all our gear crammed inside one. I’m also concerned with the safety aspect, especially with regards to collision protection.  A part of me wants to get one as they’re very affordable, but a part of me also would rather get a used sedan that’s much bigger—or an even older van or SUV. What’s your take on this?

Answer:

Yours is a conundrum that so many people can relate to, myself included.  But to simplify things, it’s really just a matter of what is more important for you, the end user. Basically, it’s all down to the advantages of buying a brand-new car which is obviously that new-car reliability (which you will never enjoy in a used car no matter how perfectly maintained or seldom used it is) plus the peace of mind and protection of a new-car warranty which can be anywhere from three to five years. Plus who doesn’t like that new-car smell?

The downside to any new car, of course, is the depreciation cost—and this applies to all brands, whether it’s the cheapest model on the market or a multi-million-peso luxury brand.  The first two years are the biggest hit, when your car’s value can plunge by anywhere from 30 to as much as 50 percent. But that’s only on paper, and if you’re not buying it for a business or you don’t plan to sell it anytime soon, then depreciation should be the least of your worries.

As for buying used, it’s always caveat emptor. There’s always the risk of buying a car that was wrecked in an accident (or at least been involved in a major collision) or, that ever-present danger—buying a car that has been flooded. Even mechanics and car experts can be fooled by a seemingly well-maintained car. Buying from friends, neighbors, or people you know is also not a guarantee of a worry-free used car purchase.

But if you manage to hurdle these issues, then the used car market can be a veritable paradise of bargains with virtually limitless choices. For P500,000 to P600,000, you can get a four-year-old (or even newer) Honda Civic, Toyota Altis, or any of their compact sedan brethren. The car might even have a year or two of warranty coverage still valid. Or you can get a slightly older (4- to 6-year-old) midsized sedan like a Camry or Accord. By size category, midsized sedans have the lowest resale value regardless of brand, especially compared to subcompact and compact cars, pickups, and SUVs—so you’re bound to strike oil here. You can also get roughly 6-year-old compact SUVs (CR-Vs, RAV 4’s, etc.) for the price of a new entry-level hatchback. Subcompacts (Vios, City, etc.) are also excellent alternatives to a cheap, new hatchback. They’re also economical and easy to maintain. For half-a-million bucks, you can get a two-year-old City or Vios. A low-mileage flood-free one should still be very fresh and reliable.

Still can’t decide? I honestly can’t blame you...