Buying A Pre-Owned Car vs A New Car - Which Is Better?

Should I buy a new car or get a pre-owned one? One question that every car buyer asks themselves, before purchasing a new vehicle. In this post-COVID-19 era, personal mobility has taken huge precedence, and right now, given the number of launches we have seen in the past couple of years, we are simply spoilt for choices. But the question here is, which one makes more sense? Buying a brand-new vehicle or going for a pre-owned one? We have listed down some of the major pros and cons of both to help you make the right decision.

Buying A Pre-Owned Car:

Pros:

1. The most significant benefit of buying a used vehicle is the fact that financially it is a much sounder choice. They are much cheaper, and you let someone else take the biggest depreciation hit on the car.
2. Almost every bank nowadays offers finance on a used car. Also considering the smaller price tag, compared to its brand-new counterpart, the loan amount and EMI period are likely to be lesser.
3. The used car market is also the best place to buy your dream vehicle which, as a brand-new car, might have been out of your budget. A lot of premium/luxury cars are offered at a reasonable price in the used car market.

Cons:

1. Reliability becomes one of the biggest disadvantages of buying a used car, especially when you buy from an unorganised seller. You might end up needing to do more repairs after a short period of time. If doubtful, buying from authorised sellers might be a wise choice, who offer a warranty for up to 1 year sometime.
2. There's a reasonable amount of paperwork involved, so unless you are buying from an organised seller, you will have to take care of all of them, which are otherwise taken care of by the dealership for you.
3. Another disadvantage of buying a used car is that you will have to compromise on a lot of factors like colour, features, and sometimes even the model itself. If you do not get the model of your choice in the desired budget, you might need to expand your search to other models.

Buying A Brand-New Car:

Pros:

1. Buying a brand-new car means you get a vehicle with all the latest features and equipment available on the market. Moreover, the emotional feeling of having a new car is certainly unmatched.
2. The maintenance cost for a new car is fairly less compared to a used vehicle and most new cars will have very few repairs in the first few years. Plus, they come with multiple years of warranty and spares are also easily available.
3. New cars attract a lesser rate of interest compared to pre-owned vehicles. Plus securing a bank loan for a new car is much easier and you get way more options to choose from.

Cons:

1. New cars are way more expensive compared to used vehicles and will make a larger dent in your pocket. Sometimes the difference in the amount is almost double of what you might pay for a used vehicle.
2. While buying a new car you will also have to incur a lot of additional costs like - registration fees, road taxes, RTO fees, etc. This is not the case when buying a used car.
3. The depreciation on a new car is higher compared to a used vehicle. On average it's about 20 per cent for each year in the first three years. This means your new car will lose 60 per cent of its value in the first three years.