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Top 5 Reasons That Will Make You Purchase a Used Car

  • May 11, 2016
  • 6280 Views
The Indian automotive industry is evolving at a fast pace and with more and more features and equipment on offer, car prices are only increasing. Combine that with rising prices of raw materials and you realise that a brand new car costs a lot more than it used to.  That said, Indian economy's constant growth also means that people now have increased disposable income which results in cars being bought more frequently and this has has resulted in high volume of cars being available in the used car market.

Yes, we agree everyone wants a brand spanking new car  for themselves but a pre-owned car tends to make more sense especially for first-time buyers upgrading from two-wheelers or public transportation, or purchasing a secondary car for your home. Here are our top five picks on why a used purchase makes more sense.

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Reason 1: Cost cutting and upgrade
As soon as a new car rolls out of a dealership, on-road value depreciates by about 10 percent. Buying a used purchase means you have to pay a lot less than the original value of the car (depending on year of manufacture and number of kilometres done), thus saving costs.

Consider the example of a new Maruti Suzuki WagonR VXi available in New Delhi, costing Rs 4, 72,560 which includes all the necessary taxes and paperwork. Here is the breakup: Ex showroom price: Rs 4,37,511 + RTO: Rs 18,100 + Insurance 12,949 + MCD Parking fee in Delhi Rs. 4,000 = Rs 4, 72,560. After a year, the same vehicle would have done about 15,000km or slightly higher and would be available in the pre-owned market anywhere around Rs 3.70 lakh, give or take Rs 15,000 depending on where you are purchasing it from, a certified dealer or an individual seller. Buying from a dealer would cost you more for the added warranty on the mechanical and electrical parts. But, then again, you could actually upgrade to a sedan for the on-road cost of a WagonR. A two-year-old Swift DZire Vxi that has done about 30,000km can be yours for Rs 4.8 Lakhs. So, what you get for the same amount of money is a car which has better features, more space and if you get a right deal, you might get a higher variant as well.

But, then again, you could actually upgrade to a sedan for the on-road cost of a WagonR. A two-year-old Swift DZire Vxi that has done about 30,000 kilometres can be yours for Rs 4.8 Lakhs. So, what you get for the same amount of money is a car which has better features, is larger in size and if you get a right deal, you might get a higher variant as well.

Reason 2: Driving without Stress

A pre-owned car has its own benefits. Since it has been 'run-in', you can take it out on long hauls without any hassles as soon as you buy it. Just be sure to get it inspected by a trusted mechanic or workshop as a double check before you head out.

Now, consider the same scenario when you buy a new car instead. For the 500 initial kilometres on the odometer, car makers emphasise on running-in your car which improves the life of the vehicle

For Sale Placard

Reason 3: Relax, You won't get fleeced

With the progress of the Indian automotive industry, pre-owned car market has also evolved. Dealerships now offer warranties for a slight premium which keeps you at peace with the fact that you are buying a car that is certified. Confident enough? You can go online and check for certified cars that are thoroughly inspected by an engineer. Still want to buy a new car?

Reason 4: Depreciation Value is lesser

All cars depreciate! Having said that, a pre-owned car won't depreciate as quickly as a new car, since the former has already undergone the initial depreciation.

Here is how it generally works:

used car vs old car

 

Reason 5: No extra insurance or additional costs

Insuring your recently purchased pre-owned WagonR will cost you somewhere around Rs 9,000. A new WagonR would set you back Rs.12,949. And that is just one additional amount that you are paying in the total cost. Here is the break-up of what all is extra for a new WagonR VXi.

Ex-showroom price New Delhi - Rs. 4,37,511
RTO charges - Rs. 18,100
Insurance charge - Rs. 12,949 (for 1 year)
MCD Parking Charge in Delhi: Rs 4,000 (One Time)
On Road Final Price Rs. 4, 72,560/-

The total additional charge which does not include an additional warranty that will cost you about a quarter of the ex-showroom amount is Rs 35,049/-.

However, there are some hassles of buying a used car. Paperwork needs to be accurate and all required additional documents would cost you a mere extra cost, but it is there. Then again, a new car's cost would be much higher. And even if you sell your car later, depreciation is lesser and you would not lose much.

After considering all the factors above, you can calculate yourself how much you would be saving when buying as well as selling a used car without putting a big dent in your wallet. All in all, going for a used car makes more sense.
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