The used car market has grown beyond our imagination.
In the fiscal year 2020 over 4.2 million units of used cars were sold in India. In comparison only 2.77 million units of new cars were sold in India– Statista.com.
Why are people choosing used cars over new cars? What are the benefits? Is it worth the risk? Are there any lemons to look out for? Is all the hype really worth?
To answer these questions, let us go through the Pros and Cons of used cars, which will definitely help you decide.
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Pros of Used Cars:
- Lesser Cost-
The most apparent advantage is that we get used cars for a much lesser cost than the new car for the same model. A car worth 1 lakh will cost around 20 thousand rupees lesser after 1 year. As the years increase, the depreciation value continues to rise and the purchase price continues to fall. Do visit www.gaadibazaar.com for thousands of used cars at affordable costs.
- Lesser Insurance Premium
Older cars are usually cheaper to insure. This is as the Insured Declared Value (IDV) of the car depreciates as cars age. The standard Car Depreciation Rate Table as per Indian Motor Tariff is as below:
| Age of vehicle | Depreciation rate to calculate IDV |
| Brand New Vehicle (just before purchase) | 5% |
| up to 6 months | 5% |
| 6 months – 1 year | 15% |
| 1 year – 2 years | 20% |
| 2 years – 3 years | 30% |
| 3 years – 4 years | 40% |
| 4 years – 5 years | 50% |
| more than 5 years (model is obsolete) | decided mutually between owner and insurer |
Considering that IDV rates are going to decrease further, your wallet will not take a beating when you consider insurance for used cars.
- Easy Finance – Lower loan amount
Since the price of the car is lower, it is easier to get loan approval for most salary slabs in India. If investment was your major concern, used cars is the solution. Chola offers you instant approval and minimum documentation for used car loans.
- Top Spec Car at lower price
Generally, the variation between the lower Spec car of a particular model and the top Spec car of a particular model may be about 2 to 4 lakhs. But with used cars, you can get the top spec car model at the same price as the lower spec model.
Cons of Used Cars:
- Looks can be deceiving
Some dealers and private owners sell refurbished cars at a much lower price. These sound good on paper but may give you a huge maintenance and repair costs. Gaadi Bazaar’s certified dealers ensure you get the best vehicle at best costs.
- Outdated Technology
Your used car might not have ABS, whereas it is now almost a mandate in all new cars as a safety feature. As years pass by, more features will get outdated as new betterments and add-ons are added to every new car. If you need these features, you need to shell out a little extra.
- Lesser Options
To be frank, you may not get lot of options to choose from. It’s mostly looking for a best fit amidst the limited options that the dealer may offer. For example- You may end up with a well maintained car, with good engine and with good ride quality. But the car might not be in your choice of color.
- Limited Warranty
You will need to check if the car is still under manufacturers’ warranty if you are buying used cars from private owners. Else, you will miss out on warranty and you will have to buy one. Certified dealers offer warranty for used cars for a limited period.
Gaadi Bazaar is a reliable online platform that makes it easier to buy used cars. From decision making to finance, we’ve got it all covered. To know more visit www.gaadibazaar.com.
Benefits for buyers from Gaadi Bazaar:
- Wide range of cars
- Get best deals from certified buyers
- 100% certified cars
- East loan assistance available from Chola. Click to check your loan eligibility at no cost.