The used car vs. new car argument is not new. Years ago, people would consider selling their car only after a decade as there were no alternatives to a new car. But, nowadays people switch between jobs and cities two to three times in 10 years, so it’s no wonder that the car ownership lifecycle has reduced drastically. To help you make an informed choice, let’s go through some factors which are necessary to consider before purchasing a car.
Used Car vs. New Car: Which One Should You Choose?
Let’s compare a used car against a new one in terms of price. Isn’t that always helpful?
Imagine you’re interested in a car that costs Rs. 10,00,000. Either you can purchase the vehicle at its current price or opt for a five-year-old model which costs Rs. 5,00,000 because of 50% depreciation.
Now, let’s compare the two scenarios in terms of the costs involved.
Quick Loan EMIs: You opt for a car loan with a tenure of 5 years. You pay Rs. 1,00,000 down payment and borrow the remaining Rs. 9,00,000 with 10% interest; the EMI on your new car will be 19,122. Whereas, borrowing Rs. 4,00,000 with an interest rate of 14.5% for a used car, the EMI will amount to Rs. 9,411. This shows that financing for a used car is much cheaper.
Resale: Because of 50% depreciation, you will receive Rs. 5,00,000 when you re-sell your new car after 5 years. However, With the depreciation process being much slower after 3 years, a used car will sell at Rs. 3,50,000. You lose Rs. 5,00,000 on a new car, but only Rs. 1,50,000 on a used car.
Insurance: The annual insurance cost on a new car would amount to Rs. 10,000 whereas on a used car it’s about Rs. 7,500 or lower. If you plan on using the used car for 5 years there will be a reduction of Rs. 12,500 in insurance payments.
Maintenance: Small dents, scratches, or replacement of parts in a new car could cost you a big buck especially if not insured. The advantage with a used car is that; platforms like CARS24 offer a complimentary 6-month warranty to protect their buyers from unforeseen repairs and maintenance costs.
Conclusion
Purchasing a used car from an online marketplace like CARS24 will result in significantly lower expenses over five years than buying a new one. CARS24 offers various advantages like quick financing with minimal documentation, a 7-day return policy, 140 checkpoint quality tests, and a wide variety of cars to choose from.
