Benefits Of Buying A Second-Hand Car

Purchasing a car is a significant decision, not only emotionally, but also financially. While many prefer new vehicles, others see second-hand cars as a more practical choice. If you are planning to buy a car, you can consider a second-hand car.

Let’s discuss the advantages of purchasing a used car, as well as the tips before finalising the purchase.

Facilitates affordability and savings

Second-hand cars are significantly cheaper. With cars losing their value over time, you can purchase a sought-after model at a relatively lower price. This also means reduced monthly EMIs if you are taking out a loan.

Minimising the depreciation of your vehicle

The value of a new car starts depreciating from the moment it is driven out of the showroom. Typically, the market value of a car decreases by about 20% per year for the first few years after its purchase. This means that a new car will lose roughly 50% of its value during the first two to three years. Though various cars have different depreciation rates, some luxury cars have a steep depreciation rate over the first few years.

Cars that are in low demand also lose their value quite significantly over time. You can avoid that hit by buying a second-hand car, as it would have already suffered its maximum depreciation by then and will not lose much value in the forthcoming years. Some of the factors that you should keep in mind before calculating the depreciation and buying a second-hand car at much cheaper rates include:

• Brand: Some brands have prolonged value due to their popularity, while others lose their value significantly due to increasing competition. Thus, thorough research can get you close to 60 per cent of a car’s price in three years.
• Vehicle Condition: It is recommended to check the fuel exhausts and any oil leaks before choosing your second-hand car, which gives you the power to bargain better and save money on future repairs
• Performance: A car offering better distance per litre of fuel is your best bet, as it will not only save you money but is also an indicator of a car’s good performance.

Avoiding the registration fees and other charges

When you buy a new car, you will have to make numerous payments to the government, such as one-time registration fees, road taxes, and other RTO charges, which swell up the on-road price of the vehicle. Opting for a used car is instead a better option to avoid these extra charges, as it would have already been paid by the first owner of the vehicle.

Full assurance and warranty for the vehicle

Most recognised pre-owned car dealers provide service history and warranties for the cars they sell. This assurance ensures that the vehicle is in good condition. Even individual sellers can provide receipts, original manuals and service reports of their vehicles when you buy a second-hand car.

Add-on installations at no extra price

Many vehicle owners install add-ons like a protective film on windscreens, spoilers, bumper guards, alloy wheels, etc. They not only provide an additional protective layer to the car but also add to its looks. If you try to install these features in a new car, you will have to shell out a hefty sum of money. Buying a second-hand car can help you get pre-installed accessories at no extra cost.

Reduced rates for car insurance premiums 

Insurance premiums are based on the value and age of the vehicle. A second-hand vehicle usually has lower premiums for third-party car insurance.

Certified pre-owned vs. regular used cars

Certified pre-owned vehicles are inspected, serviced and approved by brand-authorised dealers. They are usually provided with a warranty and roadside assistance in case of a breakdown. They cost more than a regular used car, but you get additional reliability and reassurance.

On the other hand, regularly used cars are cheaper, but the health of the vehicle may be compromised. Make sure you inspect the car, test drive and verify documents before purchasing.

What to check before buying a used Car?

Here are some main things or components to check before you buy a used car:

• Engine and mileage: Check the engine quality and mileage of the car.
• Service history: Ensure the vehicle has been routinely serviced.
• Exterior and interior condition: Check for rust spots, dents, leaks and upholstery conditions.
• Test drive: Be attentive to unusual noises. Test brakes, steering, air conditioning and suspension.
• Documents: Check that the registration certificate (RC), insurance, pollution certificate and loan clearance (if applicable) are up to date.

Tips for negotiating a good deal

• Know the present market prices.
• Use minor flaws as a point of negotiation.
• Inquire about the price of future services or expenses.
• Compare quotes from both private owners and dealers.

Legal and RTO formalities

• Ensure the transfer of ownership at the RTO when you buy a used car.
• Obtain a no-objection certificate (NOC) if the RTO is in a different state.
• Get the insurance in your name.
• Verify pending challans or loans associated with the vehicle.
• Apply for a change in registration number if moving the car to another state.

Contribute to the environment

Purchasing a used vehicle is an environmentally friendly decision. It minimises the demand for fresh materials and decreases factory emissions. Recycling a car is both pragmatic and good for the planet.

Conclusion

A second-hand car can be a wise compromise between practicality and cost savings. You get more value for your money, lower insurance premiums and fewer worries about depreciation. Taking the time to check the vehicle condition and negotiation will get you a reliable car that will last for many years.

While you make the effort to purchase the right car, let us ensure that it is protected. Fill out the form on this page and gain professional advice on four-wheeler insurance. We'll assist you in selecting smart coverage for your new vehicle.

FAQs

• Is maintenance more expensive for a used car?

A used car may face unexpected issues and the maintenance cost may increase. When buying a used car, inspect the service history and purchase from reliable sellers or dealers.

• Can I transfer insurance to my name after purchasing a used car?

Yes, you can transfer the existing policy in your name by approaching the insurance provider with relevant documents.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.