OLD CAR VS NEW CAR

Here i am taking you through pros and cons of buying a pre-owned car.

PROS

• More options for your money: More or Same car for lot less money. For the price of a new car you can bring home a well-maintained pre-owned car from a much higher segment. Sedans from higher segments (C and D) lose as much as 40% of their value in the first year alone! My friend who recently bought an one-year old Corolla Altis, which retails for almost Rs.14, 00,000  had it for about Rs.8, 50,000! These days a 3 to 4 year old Honda City, Mitsubishi Lancer or Maruti Baleno will go for close to the same price as a new Alto.

• Reliability: With most cars on the market today, long-term reliability is part of the package. A well-maintained sedan with 40,000 km on the odometer can be considered a virgin. 

• Certified pre-owned cars: Certain authorized dealerships now offer certified pre-owned cars.  Maruti and Mahindra is doing it for the past few years. While these cars carry a premium on their price tags, they are put through an exhaustive inspection and change of parts to ensure a near-new car experience. 

• Extended warranties: If the pre-owned car you are looking at is only a year or two old, you can take advantage of an extended warranty. There are two types of extended warranties: those that cover almost all components (like a new car warranty), and others that warrant only the engine and transmission.

• Financing availability: Financing is now available for used cars, though your financial institution may have restrictions on the models. 

CONS

• Maintenance: This is an often-overlooked factor. The cost of maintaining a pre-owned car of a given price will be more than the cost of maintaining new car of the same price. For example, a 5 lac rupee pre-owned Honda Accord or Mercedes Benz W124 will cost more in upkeep than a new 5 lac rupee car.

• Difficulty in finding: There is much effort involved in searching for a pre-owned car that suits your taste and budget. You may have to scan many advertisements and visit several dealerships before finding the car for you. It is not as simple as walking into a showroom and filling the order form for a new car.

• Not the latest: The best deals to be had are often on cars that are a generation or two old, such as older Honda Accords, Toyota Qualis, and Maruti Zens. Of course, there are also some good deals available for current generations.

• Higher interest rates: Potential customers generally buy pre-owned cars with cash. The interest rates on used car loans are significantly higher than on financing for new cars. 


• Car history: Pre-owned cars may have been damaged by negligence, floods, or accidents and only superficially repaired. Verifying car history can be a time-consuming chore.