BENEFITS OF BUYING A USED CAR
As we enter our first job, most of us have two dreams, a great house and a good car. Both our dreams are not so inexpensive. A Millennial today looks for luxury at the best price. An impatient generation, we wish to have everything in a very short period of time. But we are very smart too. Anything that will reduce its value drastically over a period of time is definitely not our choice. Like a new car, it does not only come at a very high price but is also a highly depreciating asset. Some will definitely argue about the price of a used car and the reliability of the product and the idea that we can easily bargain while buying a new vehicle but the associated fees, depreciation in value (which is very high in the initial few years) and the ownership cost may set you back by a few lakh for an average 5~8 lakh car.
Okay, so if you are not convinced, let’s look into the benefits in detail.
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Comparatively lower price tag with lesser depreciation
Remember the old saying that a car loses lakhs in value the moment you drive it of the showroom. We believe it is still true and that is what makes a pre-owned car cost effective like you can buy a 2015 Hyundai i20 for a price of 2018 Hyundai i10. Obviously you get better features in your car with more features at the same price and also you can drive it for a year or so and if properly maintained you can resell it and fetch almost the same price you bought your i20 for. That is never true with a new car. Let someone else buy a Honda City for 15 lakhs, and it can be yours only for 10 lakhs. If you buy a car that’s less than two year old, it will still depreciate but not like a new car, you shall definitely lose money but exactly at the rate in which you are driving it and who minds saving those initial extra bucks 😉
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Falling Insurance Premium
The rate of annual insurance premium fees depends mostly on the value of your car which obviously is calculated on model and the year of manufacturing. A new car’s value is highest in the first year and subsequently reduces in the following year. So buying a pre-owned car will save you that extra insurance amount too.
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Needless extras on new car and Cheaper alternative on used cars
When you buy a new car almost all the dealers install needless extras on your car. They will add a pinstripe or a protective film or anti rust coating for which they charge you exorbitantly high amount of money. One can get any or all of these add-ons at a much lower cost from an after sales installer. Regardless, these add-ons or changes do not add single paise to the resale value of your car. You can visit any of the resale valuation website or get valuation done physically and they do not even consider these add-ons a considerable factor while deciding the value of your car. When you buy a pre-owned car, you may not get all the useless/less useful features but you certainly won’t end up paying for the features you didn’t ask for. On the other hand, when you want to get specific add-ons like say a sunroof or a rear parking camera, they are easily available in the market at a very cheap price as compared to what the first owner could have ended up paying at the dealership.
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Condition
Cars today are built to last easily for 1 lakh+ KM, so when you buy a car which has been driven for 20000 kms you are actually not sacrificing on the performance or drivability or reliability or on the overall condition of the car to get a good price effective deal. With the kind of options which are easily available in market it is not very difficult to get a pre-owned car in scratch free condition and in excellent mechanical condition. You can also take help of reliable mechanics around you to find out that if the car is in truly a “new like” condition. In case you still don’t trust it, go to your favourite dealer and buy an inspected pre owned car which they have made sure meets the strict quality requirements. They not only give you a manufacturer warranty but also services as a package with the car. This may ask you to shell out a slightly higher premium for your car but you can definitely get assurance of the quality in case you know little or nothing about a car and you will also get that peace and the satisfaction that a new car would have given you and not to say it again you saved that extra buck too.
FINAL WORD
New cars smell great, at least for some, also the ribbon on the hood looks attractive, but how much is that scent and ribbon really worth? By logically looking beyond the selling price and also considering the total cost of ownership, one can calculate and get a fair idea as to how much one needs to pay to get the privilege of being the first owner of a car. In buying a pre-owned car, one may have to spend a little extra time on research, but with the difference from the initial dealership price and other long term benefits, who minds that extra work.
Congratulations on that smart choice you made.
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