The automotive industry is evolving at a rapid pace, and as a result, the cost of new cars is increasing. This makes buying a new car a significant financial investment for the average person. However, an interesting trend has emerged – despite the rise in prices, the average lifespan of a car is decreasing.
This presents an opportunity for those looking to buy used cars either as their first car experience or for upgrading their existing vehicles. Due to manufacturers releasing newer versions of their models more frequently, more modern cars are becoming available in the used car market, making it more affordable to purchase a high-quality car.
This is not only increasing the popularity of the used cars, but also the sales has picked acceleration. According to Statista, the market size of pre-owned car across India from financial year 2016 to 2022 has ramped up from 3.3 million units to 4.4 million units.
Here are five reasons why buying a used car is a more sensible choice than buying a new one:
As a first-time car buyer, it’s important to consider the cost of the vehicle and how it fits into your overall financial plan. One option to consider is buying a used car, which can save you a significant amount of money compared to buying a new one.
For example, a two-year-old Honda City V MT can be purchased for around Rs. 7-7.5 lakh, whereas a brand new one would cost around Rs. 11 lakh. That’s a savings of Rs. 4 lakh, which is a substantial amount of money that can be used for other things such as planning two international trips.
When it comes to purchasing a car, one of the important factors to consider is the rate of depreciation. Every car undergoes depreciation over time, but 2nd hand cars have an advantage in this regard when compared to a brand new car. It depreciates at a slower rate than a new car.
The reason for this is that the majority of a car’s depreciation occurs during the first three years of ownership. When you buy used cars, you are purchasing it at a price that has already gone through this initial period of high depreciation. The rate at which a car loses value, or depreciates, can vary as it gets older. Factors such as the make and model of the car, as well as supply and demand, can affect the rate of depreciation, which can range from 10-25% per year.
You can upgrade yourself
As a first-time car buyer, you may want a vehicle that represents your entry into the world of cars in the best possible way. Thanks to depreciation, buying a used car can give you the opportunity to upgrade to a car that belongs to a higher segment than you could afford if you were buying new.
For example, if your budget is Rs. 4 lakh, you might only be able to afford a new car from the entry-level hatchback segment. However, for the same amount, you could find a used car from a higher segment, such as a hatchback like the Swift or i20 that is about 2 years old. The used car market can offer you the chance to find your dream car at a much more affordable price than buying new. It’s a great way to get more car for your money and to own a vehicle that you truly love and enjoy.
Find rare vehicles
Another advantage of buying a used car is the opportunity to find rare or unique vehicles that may no longer be available in the new car market. These cars may have been discontinued due to model updates or poor sales, but they can still be a great option for specific buyers.
For example, the Maruti Celerio Diesel was a small hatchback that came with a fuel-efficient diesel engine that delivered over 20 km/liter in city usage. If you’re looking for a reliable and efficient car that is also easy on the pocket, a used Celerio Diesel could be a great choice.
Good for beginners
As a novice driver, buying a used car for your first vehicle is a smart choice for several reasons. For one, a used car is less likely to sustain scratches, dents, or other damage as you learn to navigate the roads. Additionally, as a new driver, you may not yet have fully developed your driving skills, and this could lead to more wear and tear on the car’s running parts like the clutch, brakes, and engine internals. By purchasing a used car, you can gain experience and hone your driving skills without worrying about causing damage to a brand new, expensive vehicle.
Buying a used car can be a smart choice for first-time car buyers. It offers several benefits such as cost savings, reduced depreciation, more options, better value for money and the opportunity to purchase newer models at lower prices. It also allows buyers to upgrade to a car that belongs to a higher segment than they could afford if they were buying new.
Moreover, buying a used car for your first vehicle is a great way to gain experience and hone your driving skills without worrying about causing damage to a brand new, expensive vehicle. Additionally, used cars also provide you with cars that are now discontinued owing to model updates or poor sales, but were a great buy for specific buyers. Overall, buying a used car is a practical and cost-effective way to own your first car.