Demonetization, its Advantages & Points to Note
Everyone in India and abroad was surprised by the government's announcement to replace existing currency notes of Rs. 500 and Rs.1,000, which accounts for alm . . .
A new car or a second-hand car?
Most car buyers go through today this dilemma!
A new car would be the obvious choice for most buyers. However, with the second-hand car market gaining more acceptance owing to the standardisation and formalisation of the sector, it is giving tough competition to the new car market.
Ravi Chandra, a school teacher, has been thinking of buying a car for some time now. When he comes across advertisements of cars, he is tempted to buy a new car with the latest features. Then, people also suggest that new drivers like him should get some experience on Indian roads by driving a used car first. Some say being the first driver of the car is a surreal feeling, others point out the affordability of pre-owned cars. While low maintenance cost, warranty, and free roadside assistance all make a strong case for new cars, but lower depreciation rate of used cars cannot be ignored. Ravi is in two minds and if like him, you too are in a bit of confusion about which one to buy, here are few factors that will help you decide better.
There is a significant difference in the price of a new car and a pre-owned car. The reasons are obvious as one is rolling out of a showroom, while the other has been running on roads for some time now. While the price of the new car depends on the model and its features, the present condition and age are considered in the case of used cars. To understand the price difference between the new car and used car, you must compare the price of the same model with more or less same features. If you base your judgement on the price difference, do remember to add the cost of maintenance that used cars require to reach the right conclusion.
When it comes to the availability of cars, the market for used cars is growing rapidly. From a hatchback to a sedan and from an SUV to a sports car, you can get most of the cars in the pre-owned car market. However, manufacturers do not just keep making the same car model. Every quarter, they launch a never-seen-before vehicle with features that will amaze you. Briefly, in both cases, you are spoilt for choice as a customer.
Car Features and Technology:
In this section, new cars take the cake. Car manufacturers unveil a new car with the latest features and technological improvements to provide maximum comfort to the occupants. In addition, if we talk about design, they look superior and make a huge style statement. However, when you hear the word ‘used car’, do not visualize a rickety vehicle. They too go through all kinds of quality checks and are given a facelift to look as good as new. As far as some features are considered, you can always get your used car customised.
The moment a new car rolls out of the showroom, it loses about 10-20% of its value at that instance. However, if you buy a used car and sell it after two-three years, there is a healthy chance that you may get to sell it at the same price you bought it , as the depreciation rate of used cars is quite low.
It is an important factor to base your decision on because cars like any other machine will require repairs eventually. Cars usually come with three to seven years of warranty that can be extended as well. A new car will easily take care of your servicing expenses but a used car, if not in warranty period, can have an additional cost. So, always check the warranty period before buying the vehicle.
This factor comes into play when you decide to buy the car via a loan. While most financial institutions offer car loans for both new and pre-owned cars, the terms and conditions for both are different. A new car loan will get you a higher loan amount as well as a lower rate of interest. In case of a used car loan, the borrowing amount would be lower and the terms of repayment are more flexible. You need to calculate how much interest money you can comfortably pay to see if you can afford a new car or a used car.
Which is Suitable For You?
There is no one answer for which car to buy. As the above factors reveal, both new and used cars have their advantages and disadvantages. Let them be your guide for choosing a new or a second-hand car. It all depends on what you want from your car and how much you can afford to pay without your monthly budget going for a toss. If you want your car to make a statement for you and you can easily afford the car model with latest features, go for a new car. However, if you are happy with a reasonable performance and do not want to overshoot your budget, opting for a used car will serve you better.
From long drives with family to reaching office on time in rush hour, owning a car makes life much easier and comfortable. In addition, buying a car is a wise financial investment as you begin to own a valuable asset. While plenty of options is a matter of joy, picking one from a huge range of new and used cars is not that easy. There are pros and cons of both types of cars and it may take some calculation and research to figure out your answer but once you have done it, get ready to get in the driver’s seat and vroom to your favourite destinations.
The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.