If you are planning to buy a car this season, should you buy a new one or settle for a pre-used model? As much asyou like the idea of sitting behind the wheel of a spanking new automobile, the associated costs can cause a huge dent in your savings. So for those who wish to drive a car but keep your finances under control at the same time, buying a used car might be a smart option.
The used car market has witnessed a huge growth in recent times as more and more people are opting to buy pre-owned cars. Here’s a quick guide to help you understand why buying a second hand car can be a better bet than buying a new one.
Certified Pre-Owned Cars Galore
Gone are the days when the pre-used car market was a highly unorganized sector. If you are worried about the quality of the car, its engine and associated parts when opting for a used car, we have good news for you! Major car manufacturers have started selling certified used cars and they even have dedicated sellers for them. All cars that are resold at dealer showrooms are tested by the car manufacturers, and are approved for resale only once they have gone passed a quality check. So you don’t have to consult a mechanic about the quality of your car, as it has already been certified by the manufacturers. You can rest assured that the used cars will be in good shape!
Better resale options
While buying a new car has its own set of benefits, the price of a new car tends to drop far more significantly than that of a used one. The value of a car usually depreciates the most in the first year. To give you an example, suppose you buy a new car worth Rs. 7 Lakhs, and you decide to sell it within a year of its purchase, there is a good chance that you will have to settle for at least 20% less than the original price of the car.
Compare this to pre-used cars where you are more likely to get a better deal when you sell your car. The value of a used car also depreciates, but not as much as a new car does. Also, if your pre-used car is a popular model, the chances of you getting a good deal when you sell it are higher
Availability of Used Car Loans
Many car buyers opt for Used Car Loans to buy their desired car model. Earlier banks were reluctant to offer loans for pre-used cars, but with a growing second hand car market, the tables have turned and you can easily get a Used Car Loan.
Since the price of a pre-used car is usually lower than that of a new car, a lower loan amount will suffice. The EMIs will be lower. A Used Car Loan won’t make a big hole in your pocket and is be easily and quickly repaid.
Useful tips for buying a second hand car
- Opt for certified company cars.
- Do your own review of the car’s engine and essential parts even though they have already been tested by the car dealer.
- Opt for popular models and colours like white and silver as they will have a better resale value.
- Test drive the car before you choose one .
- If you are planning to apply for a Used Car Loan, make sure you have the loan documents ready before approaching the car dealer. Additionally, do thorough research before deciding on a Used Car Loan and don’t blindly take the one suggested by the car dealer.
With the large existing pre-used car market, it’s all about making a smart choice! So think and act wisely!
Nicely Describe all this things,Thanks for sharing this awesome article…
It is true that recent times is witnessing a huge surge in second hand car demands. While people are willing to pay for brand new automobiles, used car purchases often seem the more logical option. In fact financial advisors, too advise for it. The first and foremost reason for such a choice would surely be the cost, yes. Used cars cost much lower than new ones. When paying off a long car loan, down payment for a used car being lower than new ones, help. Also as you have mentioned, added expenses also is greater in case of new cars. The second important factor should surely be – used cars have lower insurance values than new cars and hence paying less is always a better option. I loved the fact that you mentioned about the resale value difference of new and second hand cars and that is in fact a very significant reason to choose used cars over new ones. New car prices plummet down rather too quickly in the first few years of ownership and no machine lasts forever. So there will come a time when one would be in need of getting rid of his/her car and making a lucrative deal is what all of us want. So it is better to purchase a used car and have less money to lose than spend a fortune on new cars and still get less when you sell them off. You have rather too aptly described the ways to look for the best used cars in the market and you surely have guided us through ways to avoid a rip off. But I feel the only con for buying a second hand car is the maintenance cost, because if it is a used car then surely it has been to repairs and knowing the extent of its damage before will help us assessing its maintenance cost in the future and that factor should be well considered before going for a purchase. If this cost is high then the fact that one has to spend less on the initial payment becomes null and void.
Hi SG,
Thank you for your feedback. We really appreciate it.
Regards,
Team BankBazaar