Personal mobility is getting a major push in the post-COVID-19 period. Self-hygiene and social distancing have become two of the key reasons why more and more people are opting to buy a four-wheeler. While car sales over the last six months have shown a progressive growth in footfalls at showrooms, at the same time, there has been a growth in used car sales as well. This is understandable given the fact that not everyone can afford to get a brand new car given the current economic state of the country. 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 New Car
Buying a brand new car means you get a vehicle with all the latest features and equipment available in the market. Moreover, the emotional feeling of having a new car is certainly unmatched.
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 special services like Road-Side Assistance.
New cars attract a lesser rate of interest compared to a pre-owned vehicle. Plus securing a bank loan for a new car is much easier and you get way more options to choose from.
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.
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.
The depreciation value for 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 two or three years itself.
Also Read: How To Check A Used Car Before Buying
Buying A Pre-Owned Car:
The biggest benefit of buying a used vehicle is the fact that financially, it is a much more sound choice. They are much cheaper and you let someone else take the biggest depreciation hit on the car.
Although they attract a higher interest rate, given the fact that the loan amount and EMI period are likely to be lesser compared to a brand new vehicle, the monthly payment you make will be much lesser. It's also easier to save up and pay in cash as the amount is much smaller.
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.
Reliability becomes one of the biggest disadvantages of buying a used car, especially when you buy from an unauthorised 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.
The Ministry of Road Transport and Highways (MoRTH) has proposed to increase the renewal of registration cost of passenger vehicles older than 15 years by 25 times. So, from the current ₹ 600 it could go up to ₹ 15,000. So, if you are planning to get a vehicle that is 10 years old, then you can only use it for 5 years before needing to re-register it. So long term ownership will be an issue.
Another disadvantage of buying a used car is that you will have to compromise on a lot of factors like colour, features, 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.