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Planning to buy a Car? Confused between a Used car and a New Car? Here is your car buyer's guide.

Riya is now settled in her job and wants independence in terms of personal mobility. While the option of Cab Aggregators looks feasible enough; she wants to own a machine that she can term as a ‘safer’ mode. Also after years of hard work, who wouldn’t want to flaunt their success? – Owning a car is still seen as a ‘status symbol’.

Now that Riya has decided that she ought to buy a car; a million-dollar question revolves around her mind – whether to buy a brand new car or opt for a used one? We at Auto Punditz would want to answer that – A used car purchase would be more sensible. Let us see the reasons why –

  • New Car Depreciation: The moment you drive your new car off the lot, it will depreciate by as much as 11 percent of its value. Every car undergoes depreciation but a used car has an upper hand for the same when compared to a new car. It depreciates at a slower rate when compared to a brand new car. Have a look at the Depreciation Chart for better understanding:


As seen above, Depreciation of a vehicle is at its peak during the first three years of purchase. But when you are buying a used car, you will obviously purchase it at a price that has already gone under major depreciation.

  • Price of the Used Car: Buying a used car will not only be a much cheaper affair but would also allow one to explore the higher segments. Ex: A friend of mine recently bought a top-end Scorpio AT (2010 model with 52kms  on the odo) at a price of Rs.7 Lakh – while he couldn’t have sneaked a top-end NEW Maruti Swift Diesel at the same price! Also, note that the Top End NEW Scorpio would currently cost over Rs.15 Lakh.

  • Better Condition & Reliability: With time, today’s generation cars sustain for a longer period of time. The improved technology has enhanced the durability factor of the vehicles and thus the age of these machines has increased. Hence, buying a used car is a much tension-free decision now.

  • Organized Sellers: Earlier the market was dominated by Brokers and lacked trust-worthiness. However, many OEMs and Organised players have jumped into the bandwagon of selling ‘CERTIFIED’ Used Cars. The experience promised is the same as buying a new car and the same is backed with easy serviceability.

  • Cheaper Insurance: No matter the age of your car, insurance will be a concern. Rates will almost always be lower for used cars than new cars, but regardless, keeping coverage costs low is a good savings strategy.

Otherwise, The factors which will incline you towards New Car are:

  1. It’s NEW, duh! – A new car hasn’t been in any accidents, hasn’t been mistreated by unknown evildoers, doesn’t smell funny, has seen no wear or tear, and comes with a clean history that includes only being driven off the line, onto a transporter, and then around the dealer’s lot.

  2. New Launch – Almost 50% of the Top 10 selling cars today are the ones that have been launched in the past 2 years. Cars have become a fad today and customers are opting for newer models which are better looking and are loaded with the latest features. The newer the car, the more modern the geeky tech that’s packed inside. Multimedia and navigation interfaces are constantly evolving and improving, so if you have to have the latest in gadgets (and don’t want to add them yourself post-factory) the selection will be better in the new-car showroom

  3. Financing — Banks offer lower financing rates on new vehicles because the vehicles are inherently worth more and have not already been hit by depreciation.

  4. Lesser Maintenance cost — Some new cars, mainly those from luxury marques, include free scheduled maintenance for a certain amount of time or mileage. This built-in cost saving should be considered in the final price analysis if applicable.

  5. Hassle-free Purchase Experience – Once you’ve chosen a vehicle or at least the brand you’re interested in, much of the new-car search can be offloaded on the salesperson, who can find the car you ask for. The same search in the used realm requires a lot more legwork on your part—hunting on the internet, visiting multiple private sellers, and driving from used lot to used lot.


Indian Used Car Sales Statistics (v/s new car sales)

Overall, we believe that the Indian Consumer has aligned towards used car purchases and the segment has grown phenomenally well. As of date, used car sales have overtaken new car sales and the same is bound to double by 2020. Hence, if you think buying a used car from an organized player, is a smarter move.


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