New vs. Used Cars: How to Buy Smart and Avoid Scams with John Cadogan

By Molly Benjamin, Founder of Ladies Finance Club

Listen to the full podcast here.

Buying a car is a major financial decision, and choosing between new cars and secondhand cars can have a big impact on your money, car financing, insurance, and long-term vehicle costs. Whether you're looking for the best used car deals, considering an electric vehicle (EV), or debating between petrol vs diesel, it’s crucial to make an informed decision.

To break it all down, I sat down with John Cadogan from Auto Expert, one of Australia’s top car experts, who’s spent over 25 years covering car buying, maintenance, and insurance. In this episode, we covered common car-buying mistakes, how to avoid scams, and whether new or used cars offer better value.

New vs. Used Cars: Which One Saves You More Money?

When deciding between buying a new car or a secondhand car, it’s all about cost, depreciation, and long-term expenses.

A new car comes with the latest features, warranties, and reliability, making it a stress-free option. However, it loses 30% of its value as soon as you drive it off the lot. Depreciation is one of the biggest financial losses car owners face, and if you’re financing, you could be paying off a car that’s worth significantly less than what you owe.

A secondhand car can be a much smarter choice if you're looking to minimise depreciation and lower upfront costs. However, it’s crucial to check the service history and vehicle condition to avoid expensive repairs down the line.

How to Avoid Scams When Buying a Used Car

The biggest risk with buying secondhand cars is falling for scams. John recommends doing a Revs Check to see if the car has been written off, stolen, or still has outstanding finance. You’ll need the VIN (Vehicle Identification Number), which acts like the car’s fingerprint, to get the full history.

It’s also essential to get a pre-purchase inspection from a trusted mechanic. Spending $150–$200 on an inspection could save you from buying a lemon that needs thousands in repairs.

Be wary of private sellers who refuse inspections, this is a red flag that they might be hiding something.

Best Secondhand Cars to Buy for $15,000

If you're shopping for a used car under $15,000, reliability is key. John suggests looking at Toyota Corollas and Mazda 3s, as they are affordable, fuel-efficient, and easy to maintain.

If you need more space for family or road trips, the Toyota RAV4 or Hyundai Tucson are solid choices. Avoid brands with poor resale value or high maintenance costs, as they could cost you more in the long run.

Are Electric Vehicles (EVs) a Smart Investment?

With the rise of electric vehicles in Australia, more people are considering EVs for lower running costs and sustainability. However, EVs aren’t the right fit for everyone.

Key factors to consider before buying an EV:

• Charging accessibility – If you don’t have off-street parking, relying on public chargers can be inconvenient.
• Long-distance travel – EVs require careful route planning, and charging stations are still limited in some areas.
• Depreciation – EVs may lose value faster as new technology and models emerge.

Tesla is still the most well-known EV brand, but affordable alternatives like MG and BYD are gaining popularity.

Petrol vs. Diesel: Which One is Better for You?

Choosing between petrol vs. diesel depends on your driving habits and budget.

• Petrol cars are cheaper to maintain and ideal for city driving.
• Diesel cars are more fuel-efficient for long-distance travel but require regular highway driving to avoid engine issues.

If you want a fuel-efficient option, hybrid and plug-in hybrid vehicles are becoming increasingly popular in Australia, offering lower fuel costs and reduced emissions.

Car Insurance: What Type of Cover Do You Need?

Many drivers assume that Compulsory Third Party (CTP) insurance is enough, but this only covers injuries to people, not damage to vehicles.

• Comprehensive car insurance is the safest option, covering both your car and others in an accident.
• Third-party property damage insurance is an alternative for those with older, low-value cars, protecting against liability if you damage an expensive vehicle like a Tesla or BMW.

John warns that hitting public infrastructure like power poles can result in massive repair bills, so checking your insurance cover is crucial.

Car Financing vs. Buying Outright: Which Costs Less?

Buying a car outright is always the cheapest option, as you avoid interest and loan fees. However, many buyers rely on car financing, which can add thousands in extra costs.

John warns against dealership financing, as it often comes with high-interest rates and hidden fees. He also advises against rolling a car loan into a mortgage, as this can extend repayments for decades, making your car significantly more expensive.

If you need financing, shop around for bank loans or credit union options with lower interest rates.

How Many Kilometres is Too Many for a Used Car?

A three-year-old car with under 50,000 km is ideal, offering lower depreciation and plenty of life left.

Once a car reaches 120,000 km, major maintenance issues are more likely, and costs can start to rise. John reminds buyers that 160,000 km is equivalent to four laps around the Earth, so expecting a high-mileage car to remain problem-free is unrealistic.

Making a Smart Car Purchase

John’s biggest takeaway is don’t let status influence your car-buying decision. Many people overspend on luxury vehicles they can’t afford, struggling with loan repayments, insurance costs, and ongoing maintenance.

Instead, focus on what you need rather than what you want. Always research car depreciation, financing options, and insurance coverage before making a decision.

Whether you’re buying a new car, secondhand car, petrol, diesel, hybrid, or EV, doing your research can save you thousands in the long run.

For more expert car buying tips and financial advice, check out John Cadogan’s Auto Expert YouTube Channel and subscribe to Get Rich and Ladies Finance Club! 🚗💰

Plus, a huge shoutout to our sponsor, InvestorKit! Australia’s #1 Buyers Agency for 2023 and 2024. They specialise in helping investors find high-growth properties utilising industry leading AI and data driven research process across Australia. 70%+ of the properties they purchase are off-market and they have consistently outperformed national average capital growth rates by over 49%. Whether you’re looking to build your property portfolio or secure your first investment. Check them out here.