Buying a car is a challenging decision. Not only do you have a range of models to browse, but you also have the option to buy new, used or refurbished cars. “Should I buy a new or used car?”- Is this the question you’ve been asking yourself lately?
Now, the value of a car depreciates after some time, so it is not an investment. Hence, you have to be careful about its expense viability. How costly is the old or new car vs. how many kilometres you be running it? Or, if you drive short distances daily, is it even worth buying a car? Furthermore, is it better to buy a new or used car?
Similarly, if you are buying a second-hand car, you could have to consider since maintenance costs are much higher and the mileage is low for an old car, could it be financially savvy in the long run?
In this blog, we will discuss which is more beneficial – a new vs used car. We will look at the upsides and downsides of both. And also which is more financially savvy.
New Vs. Used Car: Which is the Best Option for You?
Should I buy a new or used car? Or, is it better to buy a new or used car? Picking between a new vs. used car is an emotional decision that will descend to your personal inclination and financial situation.
For example, regardless of whether you can afford to buy a new car, you may like to find a similar car if not the same car in the used car market essentially because it is more affordable. The savings from buying used could be used to accessorize and customize your car according to your taste, put into savings, or used for any future maintenance costs towards the car.
When picking between a used car and vs new car, one also has to consider the condition of the used car and its age. As of late, it has become easy to find good used cars just because of the recurrence at which individuals change cars. One can find cars that are under two years old with only a couple thousand kilometres on the odometer for a fair bit under a new car.
At the day’s end, you need to pick the car that makes the most sense for you, regardless of whether you can afford a new or used car. As long as it ticks the greater part of the crates when it comes to features, is safe, reliable, and fills your needs well, you can go either way.
3 benefits of buying a new car
In the first place, let’s look at the advantages and disadvantages of buying a new car over buying an old car.
#Number 1: The maintenance price for a new car is much less than a used car
For a new car, no maintenance is required for the initial 6 months to one year, or the initial not many 1,000 km. Following which you could require servicing. Also, initially, not many services are usually free, which may be a few, and the quantity of free services varies from company to company.
To keep an old car moving (if the car is 8 to 10 years old) you have to change the engine oil at least 3 to multiple times annually. Then there may be more costly services like changing the battery, cleaning of air channels, and so forth. And if the car that you purchased is not in good condition then such expenses can consume an immense opening in your pocket.
#Number 2: Characteristics are more advanced in a new car
Something that is the latest technology today can become outdated in 6 months or one year. So when you buy a new car, the technologies and features are modern, in terms of gear and accessories.
#Number 3: The interest rate for a car loan is higher for an old car
The interest rate for a loan for an old car is much higher than a loan for a new car.
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For example, HDFC Bank gives loans to both old and new cars. But the interest rate for a loan for a new car is 9.25%, while the interest rate for a loan for an old car is 14.5%.
2 drawbacks of buying a new car over buying an old car
#Number 1: No need to pay for the registration expense, road taxes, and so on.
On buying a new car, you also have to pay the registration expenses, road taxes, RTO charges, and so on. But for buying a second-hand car, you don’t have to worry about such costs as they are already paid by the main proprietor.
#Number 2: The depreciation rate for a new car is much higher
The depreciation rate for a new car is about 20% each year. And, the maximum depreciation happens in the initial 3 years. So in three years, regardless of whether you take the best care of your car, its value will descend at least by 40%.
Meanwhile, the depreciation rate of old, refurbished cars can’t be exactly counted, it relies upon the damages and maintenance which would be determined while you sell it, but the rate of depreciation for an old car is significantly lesser than a new car.
For example, if you buy an old car and maintain it well, then you can sell it for almost the same cost in a year or so.
Buying a New vs. Used Car: What is more practical
Now that we have looked at the upsides and downsides of buying an old car versus a new car, let’s do the math to understand which is more practical.
Let’s take the example of Aarav to understand it better.
25-year-old Aarav has made up his mind to buy a Swift Dzire. He has saved Rs 1 lakh which he would pay as the initial installment and for the remainder of the amount he plans to take a car loan. But, he is yet to decide whether he should buy a new or used model. For that, he needs to look at which would be more financially savvy.
How to Choose Between an Old and a New Car
Choosing between a more established or newer vehicle can be precarious as both accompany a bunch of advantages and disadvantages. But, to assist with making things a little easier, here are some vital considerations to remember when making this decision:
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Cost
New cars accompany a higher sticker price but have lower maintenance costs and a solid warranty. On the other hand, a more seasoned car is initially affordable but often requires more continuous repairs and maintenance.
Reliability
New cars are often more dependable compared to their more seasoned counterparts. Generally, because they use the latest technology which allows them to function at a better bandwidth.
Features
New cars are often furnished with the latest features and technology, like touchscreens, navigation frameworks, and advanced infotainment frameworks. While more seasoned cars may not have these features, they may, in any case, have the basic amenities that are important to you.
Safety
While more seasoned cars may not have certain features, a ton of new cars come outfitted with the latest safety features, for example, automatic crisis braking, extra airbags, and blind spot monitoring.
Fuel Efficiency
New cars are generally more fuel-proficient than more established vehicles and are intended to be more environmentally cordial.
Depreciation
New cars tend to depreciate faster than more established cars, meaning they lose value more rapidly. So, if you’re planning to buy a car and sell it later on, it’s important to be aware of the depreciation associated with the model and brand of your car.
Environmental Impact
New cars are often intended to be more environmentally cordial, with features, for example, cross-breed or electric powertrains, which assist with reducing your carbon footprint to a great degree.
The individual needs and inclinations of different individuals, safety, affordability, reliability, fuel efficiency, depreciation, and environmental impact are some of the factors that dictate your decision to pick between a more established or newer car. In addition, it is always considered wise for you to look for professional assistance and let the specialists assist you with making an informed decision.
New Car Vs. Used Car Interest Rates
The interest rate on a car loan is the reflection of the expense of borrowing money to purchase a vehicle. It should be noted that the interest rate can change depending on whether you are purchasing a new or used car.
- Interest rates on new car loans are lower than the interest rates on used car loans, basically because new cars are a safer investment for the moneylender.
- New cars that don’t have mechanical issues tend to have a longer lifespan, which makes them safer for the loan specialist.
- Interest rates on used car loans tend to be higher than interest rates on new car loans because used cars are considered to be a riskier investment for the bank.
- Used cars have a higher chance of mechanical issues and a shorter lifespan, which makes them more risky for the loan specialist.
- The interest rates for a new car and an old car rely upon some key factors like the age, make, model and condition of the car, and the terms of the loan.
Conclusion
At the day’s end, you have to decide which car is best for you. Both new cars and used cars have their upsides and downsides, and as long as you find a car that you like, it should not matter whether it is new or used.
One of the greatest disadvantages of buying a used car was the unorganized used car market, with dealers trying to sell unsuspecting buyers a lemon. However, companies like CarYanams offer a 12-month warranty and 7-day returns, making buying a used car as reliable as a new one.
CarYanams has a variety of used cars to browse in each spending plan, whether it’s your most memorable car or an upgrade, there’s something for everyone at CarYanams.com.
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