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Your first car choices: New vs. secondhand vs. repossessed

Many dream of owning a private vehicle. That’s why it may be one of your first major investments, as a private vehicle can help you move around without having to take public transportation.

As a first-time car owner, you have three options when purchasing a car: shopping for a brand-new one from an authorized dealership, buying a secondhand car from a private individual or car shop, or placing a bid at auctions for repossessed vehicles.

Each option has its pros and cons, so here’s a guide to help you decide the best route based on your financial capacity.

Shopping for a brand-new car

Buying a brand-new car means going to authorized dealerships to purchase the car of their choice.


  • Value for money- While some banks offer car loans for secondhand vehicles, auto loans for brand-new cars are more affordable because you’re guaranteed to get a car in mint condition. Secondhand units, on the other hand, have higher interest rates and shorter repayment terms.
  • Less effort shopping for cars- You’re confident that brand-new cars are in excellent condition, so all you need to do is find a car that matches your needs and budget. Secondhand cars, on the other hand, require some legwork, a keen eye for spotting defects, and excellent research skills to know if a supposed steal is truly a good deal.


  • Quick depreciation- A car is a depreciating asset, meaning it loses a percentage of its value the moment it leaves the dealership. If you’re on a budget, you might be better off searching for a secondhand car that’s only a couple of years old.
  • Higher insurance payments- The higher the value of the car, the more expensive your insurance premiums are.

Buying a secondhand car

Buying a secondhand car means looking for a private individual selling their old car. You can find them within your network or through online forums. You can also look at secondhand car dealerships.


  • Better reselling opportunities- A brand-new car depreciates up to 30 percent just by driving it off the dealership’s lot. By the third year, its value depreciates to half its worth. This means the first owner has taken the biggest depreciation hit, so when it’s time to resell, you can have it customized or upgraded to be resold at a higher price as long as you maintain its quality.
  • Lower insurance rates- Because of depreciation, insurance rates for secondhand cars are significantly lower than that for brand new cars.


  • Possible defects- You have to be careful when buying secondhand cars because these are not protected purchases. If there are defects, you will be responsible for the repairs.
  • Higher maintenance- Because the car you will be purchasing will not be brand-new, it has already gone through some wear and tear. You will need to pay for regular maintenance services more frequently than you would for a brand-new car to ensure it runs smoothly and safely.

Bidding for repossessed vehicles

Bank-repossessed vehicles have been legally repossessed due to the original owner’s failure to pay off their auto loans or were used as collateral. When a bank reclaims a car, it either sells it at a discounted price or auctions it off to recoup the missed payments of the original owner.


  • Cheaper than a brand-new car- Repossessed vehicles are also considered secondhand cars, so they share the same advantage of being cheaper than a brand-new one.
  • Safer than dealing with a private seller- Secondhand cars are cheap, but buying from an independent seller can be risky. You don’t know if that car was illegally obtained or if the specifications they are advertising, like mileage or fair value, are accurate. Repossessed vehicles, on the other hand, are always legally acquired, have complete documents, and are managed by a reputable bank.


  • Sold “as is where is.”- Unlike car dealerships where you’re guaranteed a car in tip-top shape, the bank is not liable for any hidden defects you did not spot when browsing through repossessed cars.
  • Quality concerns- Just like secondhand cars, the quality of repo cars are at the mercy of their former owners. If the previous owner could not afford to make their car payments after a number of years of paying for the car, there’s a chance that they were not able to maintain the car.

These are just some of the pros and cons that go with buying brand-new, used, and repossessed cars. Before investing in your first car, it’s always important to make a well-informed choice and see which option has the least number of drawbacks for your financial situation.

Let Metrobank guide you through this milestone in your life. Let’s discuss about how Metrobank can help you get the car of your dreams with a car loan.