Let us now consider why purchasing second hand vehicles is better than purchasing new vehicles. In purchasing second hand vehicles, the 7 things to consider are:-

1) Smaller hire and purchase loan.

To secure second hand vehicles one requires only limited amount of finance. Compared to buying a new vehicle, which can sometimes be quite costly.

In buying second hand vehicle, the owner has to stump out a lower amount of money, or to take a lower amount of loan for the car.

2) Cheaper insurance cover.

Second hand vehicles only require third party coverage which is cheaper. Third party insurance cover for second hand vehicles are much cheaper when compared to first party ones

3) Slower value depreciation.

Second hand vehicles are said to suffer from lower depreciation costs as compared to new vehicles.

4) Higher maintenance required.

The necessity to change certain important parts of the vehicle such as clutch, timing chain or belt, and engine wear and tear. Such repairs can sometimes be rather costly affair.

5) Less efficient.

Second hand vehicles can sometimes be unable to provide efficient service. They tend to breakdown more often as compared to new vehicles. They are, infact less reliable.

An owner of a second hand vehicle, you will undoubtedly have to spend quite a sum of money on the upkeep of second hand vehicles.

6) Wear and tear issues.

Second hand vehicles are also said to undergo risks of corrosion. In such cases, its body work will have to undergo welding repairs from time to time to keep it in proper, working condition. A second hand car, will also have to repainted from time to time. All these, costs money to upkeep.

7) Higher fuel consumption.

Some second hand cars can sometimes be said to be unable to provide you good consumption. Consumption can at times be heavy due to the carburetor system having undergone much wear and tear.

This article has gone on to discuss the pros and cons of owning a new or a second hand vehicle. Ponder carefully over it. Finally, you should be able to make the correct decision of whether to own a new vehicle or a second hand one. The choice is yours to make eventually.

In my last blog post, I wrote 5 good reasons why you should buy a new car versus a used car. But behind all the pros, there are also some cons as well.

In this post, I thought of writing a short post on 3 disadvantages of buying a new car.

1) Higher deposit required.

To purchase a new car, a person will obviously require a higher deposit or a larger loan. Interest on the car will definitely be higher, thus making the vehicle purchased costlier in the long run.

2) New car more likely being stolen.

New cars are more susceptible to being stolen as compared to second hand vehicles. An owner will then have to insure it for a higher sum of insurance. In the end, owners of new vehicles will have to bear higher financial costs.

3) Higher and faster depreciation.

Besides possessing a higher resale value, a new car also experiences a “depreciation” drop which can amount to anything from 25 – 30 percent initially. Compared to second cars, new cars which suffer from depreciation drop is normally borne by the first owner.

Should you now buy a new or second hand car? After considering all the advantages and disadvantages, you can now make your decision.

The Barisan Nasional, which consists of various political parties such as UMNO, MCA, MIC and Gerakan and the opposition which is made up of P.K.R, D.A.P. and PAS, recently collaborated with each other in Parliament. For the first time in the history of the Malaysian Parliament, the above two parties heavily criticized the vehicle insurance scheme currently offered to the Malaysian motoring public.

Datuk Mohamed Aziz (B.N. Sri Gading) says he sees no sense why insurance companies should charge such exorbitant rates for third party insurance for vehicles which are more than 10 years old.

Owners of old vehicles, who are made up of mostly village folks and pensioners, are badly affected by the insurance companies’ refusal to cover old vehicles.

A few years ago, third party insurance was within the ambit of RM100 to RM150 only. Believe it or not, this year, 2011, my wife’s Proton Iswara, had to fork out some RM380 for a RM14,000 first party policy. The above amount was arrived at even after a 55% N.C.B. deduction was made. For your information, the above vehicle is a 1993 model. Its value in the market today, is no more than RM2,000 to RM3,000.

Insurance companies were only willing to insure the above vehicle for a sum of RM14,000 first party insurance coverage. What I would like to inquire is, if in any eventuality, the said vehicle is stolen or lost, are the insurance companies willing to compensate or reimburse the owner an insured sum of RM14,000?

According to legal sources, a vehicle which is legally insured for a sum of RM14,000 should infact be paid the sum above. However, whilst speaking to my friend and one of Klang town’s top insurance agents, Mr. Goh of Goh Brothers Insurance agency, I was told by Mr. Goh himself that there is a clause in the motor insurance agreement which specially reiterates that insurance company can replace a RM14,000 vehicle insured, with a similar make or model of the vehicle insured.

Should owners refuse to accept the insurance company’s offer then the only alternative is for one to engage a lawyer to challenge the insurance company’s offer. Whatever the consequences, it would be a tremendous hassle indeed.

The third party insurance problem has come to a stage whereby the government is unable to come up with a favourable decision to aid the poor third party vehicle owners.

A few months ago, the government, with Bank Negara’s assistance, announced that anew insurance company which is to be made up of the government and private insurance companies is to be set up. It was also made known the “premiums” charged by the above new company will be acceptable to all motorists.

It now looks as if the above proposed company has erupted up in smoke, as far as third party motorists are concerned.

Datuk Bung Moktar Razin (B.N. Kinabatangan) implored that Parliament should monitor the operations of insurance companies which he claims would happily charge consumers for the slightest of things. Insurance companies had not made it easy for policy holders when they had to make damage claims.

D.A.P’s Bandar Kuching Parliamentarian, Chong Chen Jen, said policy holders were “forced” to purchase personal accident insurance before they could buy third party policy for their old vehicles. Otherwise, the companies will not allow them to purchase the required insurance.

If previously, they were supposed to pay just RM70 to RM80, now they will have to fork out more than RM200. Mr. Chong asks, “How could Bank Negara be so blind, as not to notice what the insurance companies are doing.”

The problem of motor insurance does not involve third party insurance only. I have been told that insurance coverage for other vehicles such as school buses, small lorries and even 3 ton lorries, which are usually used to ferry goods, face similar problems such as that faced by vehicles that are over 10 years old.

According to a Mr. Goh, the manager of Goh Brothers Insurance Agency in Klang, his business investment performance has been badly affected. Mr. Goh claims he is unable to provide the necessary insurance to his clients. They are now unable to obtain the necessary insurance coverage and this has resulted in business being affected badly.

Looking at the overall situation, it appears that third party insurance coverage for old vehicles which are 10 years and above, will continue to be a major headache to many Malaysian in the coming months and may be even years ahead.

Unless Bank Negara itself and the government as a whole take immediate actions to rectify the dire situation, this problem will continue to be raised by many political parties in the forth coming general election soon. It would, without doubt, be a hot topic of discussion.