When you buy a used car, you become eligible to multiple benefits. A new car depreciates around 20 percent within its first year of purchase. That means you get a 2-3 years old car at a discounted price of up to 40 percent in the used car market. And considering current market trends where there is a long waiting period of up to 12 months on popular models, it makes sense to buy used car if you can't wait that long for your favourite car.
However, you need to stay extra cautious before buying a used car. This guide to buy a used car will help you go through all the benefits and check points that you should consider.
Why should you buy a used car?
Used car purchase saves money
It's not rocket science that buying a secondhand car is less expensive. More than that, though, a properly maintained second-hand car has a more excellent value for money than a new one. For example, if a sedan costs Rs 8 lakh (on-road) for a brand new one, in approx. 6-7 lakh you may get a well-kept, less-used and a few months old car. It applies to any particular car model in India.
Also, if you have a limited budget, you have more choices to buy used car than a new car. For example, you can't buy any new car within the budget of Rs 2 lakh. However, the same money may buy a used car such as Alto, Wagon R, Santro, i10, and more.
You can upgrade your lifestyle
This point follows from the first. Take a great example of a middle-class family member who wants his growing family to have a bigger car. You may pick between the Hyundai Grand I10 and Tata Tigor with a Rs 5 lakh budget for new cars.
On the other hand, he could gladly buy used Hyundai Verna, Maruti Dzire, or even the old Honda City for the same price. These cars certainly are segments above. Bigger cars provide enhanced security, enhanced features, more comfort, and a higher social status.
It is a truth most buyers do not know. Each car has a depreciation value. You drive a new car out of the showroom, and its value immediately depreciates. The majority of cars lose 25%-30% of their value in the first year and another 10-15% in the second year. It implies that you should be ready to lose four lakhs after three years if you sell an 8 lakh rupee car.
However, if you buy a similar car on the used car market and keep it for three years, you will lose about half of your money. It is because the first owner has already absorbed the depreciation cost when you buy a used car.
No unknown variables
No matter how appealing a new car may seem, it is usually prudent to avoid purchasing one within the initial few months of sale. Regardless of how well a manufacturer tests its car, the likelihood of users encountering unexpected problems is always high during initial manufacturing batches. These problems, no matter how small, may result in a recall.
When you purchase a used car, all of these concerns are absent, so you won't have to wonder what the most common problems are, how much they may cost to repair, or, most importantly, how to deal with them yourself. At best, these problems are recognize and addressed already; at the worst, your research enables you to identify potential issues and improves your bargaining power.
Simpler financing schemes
Most car manufacturers have their own pre-owned car selling companies, and more and more financial institutions are increasingly providing lucrative loans. Therefore, if you finally purchase a used car, you no longer need to worry about hefty EMIs. Some car manufacturers with divisions now offer zero down payment schemes.
Insurance premiums are lower
Insurance premiums are directly proportionate to the age of the car, which implies that a newer car will have a greater cost than an old car. When a car is new, its value is greater, which results in a higher insurance price, but as it ages, its value decreases due to a variety of reasons, which results in lower insurance premiums.
Peace of mind
One of the main concerns of used car buyers is the questionable reliability of the car. This means that if you purchase a secondhand car that is between three and three years old, you should not concern about its reliability.
Cars, on the other hand, are very reliable due to modern engineering. Moreover, the warranty durations have increased, and most owners finally get extended warranty.
Additionally, it has become easier for car owners to get service records from any authorized workshop and show it to buyers.
How to buy a good used car?
Determine the maximum amount that your present financial situation will enable you to spend. In addition, since you cannot tailor in a specific variant, some variants of cars that may or may not be accessible on the second-hand market must be considered. Therefore, ensure that your budget is flexible and that you have a greater limit for how much more money you are willing to spend.
Evaluate the options
After you have a budget, create a list of available options. While you may focus on a specific model, you need to remain open-minded while evaluating options. The ideal way is to list your critical needs, such as interior space, engine size, safety, and a fuel variant to find a car that meets all your needs in this budget.
Consider various body types such as MPV, sedan, SUV, or even a hatchback. Additionally, check your local laws to determine the maximum registration period for a particular car type. Consider this as well when deciding how old a car you are willing to purchase and how long you want to keep it. You can also buy used car online and compare multiple models easily.
Select your option
Once you've narrowed down your options, visit the dealer or present owner to inspect the car. Ensure that you inspect the car in broad daylight and dry circumstances to obtain the most accurate understanding of the car's condition. Inspect the car's body, interior, engine, and paint.
Additionally, inspect the car's available service records, as well as the tire depth and condition of the car's tires. Examine the area for apparent signs of impact, rust, and electrical problems. When everything is in order, take the car for a test drive. When you're out test driving a used car, pay attention to how the engine operates and if the suspension makes sounds over bumps and potholes.
History of the car
Before narrowing your search, check the car's paperwork. Check the remaining warranty period, if the car has changed in any way, whether it repaints, repossessed, or stolen, and whether the manufacturer has discontinued the car or not. The last point is critical since it will determine how long the car's spare parts will be available.
Inspection by a professional
While it may seem in good condition on the outside, a second-hand car may have hidden issues. If you're not very knowledgeable about cars, after you've decided on a car to buy, most dealers will allow you to take it in for a thorough inspection.
Make an appointment and bring the car to a reputable mechanic equipped with a lift or an authorized workshop for the car's brand for a professional inspection. Typically, these workshops charge a little inspection fee. The advantage is that the authorized workshop of the brand may also determine if the odometer tamper with or not from their records and disclose any upcoming expenses.
Negotiate the price
Keep in mind that you are a consumer who has the power; the salesman wants to sell the car as quickly as possible, but you have the power to reject.
Provide your offer after all assessments and mention any conditions that may apply (like a short time warranty). Make sure you are steady on your offer. If you detect anything unsettling, walk away from the deal. If the dealer refuses to accept your offer, leave your contact information and walk away if possible. If the dealer cannot find another buyer ready to match your bid, they will surely contact you back and accept your offer.
Begin the paperwork required to transfer the car to the new owner's name after the deal is complete. To legally confirm car ownership, get the previous owner's registration.
It may seem that buying a used car is a difficult job. However, if you do your research and follow the above guide to used car buying carefully, you're likely to get a car that meets your requirements and budget.