New Car with Older Manufacturing Date

Consider a situation where a person visits a dealer to buy a new car. The test drive is smooth and he is ready to make the purchase. However, the dealer informs him that the car is manufactured 7 months back.

The potential car buyer faces a predicament of sorts. Though he wishes to buy the car, he wonders if there is a catch. This brings us to a question, which many potential car buyers face, 'Is it prudent to buy a new car with an older manufacturing date?'

Generally, dealers are ready to give a discount on such cars, which makes them easy on the pocket. However, there could be a few pitfalls of buying a car with an older manufacturing date.

Why do new cars have older manufacturing dates?

Several reasons contribute to new cars having older manufacturing dates:

• Production Cycles: Manufacturers often start producing new models months before their official release to ensure sufficient inventory. This practice can lead to cars being built in one year but sold as the next year's model.
• Inventory Management: Dealerships aim to maintain a diverse stock to meet varying customer preferences. Some vehicles might remain unsold for several months, resulting in older manufacturing dates when they're purchased.
• Import and Transportation Delays: For imported vehicles, factors like shipping durations, customs clearance, and logistical challenges can extend the time between manufacturing and the car's availability at dealerships.

Pros & cons of buying a new car with an older manufacturing date

Given below is a list of pros and cons of purchasing a new car with an older date of manufacturing-

Pros:

• Increased Negotiation Leverage: Dealerships are often more willing to offer substantial discounts on cars with older manufacturing dates to clear inventory, providing buyers with potential cost savings.
• Immediate Availability: These vehicles are typically ready for immediate delivery, eliminating waiting periods for ordering newer models.

Cons:

• Resale Value
  It may fetch a lesser price than a newly manufactured car.
• Storage-related Problems
  Cars stored in poor conditions tend to develop problems like fading paintwork, corrosion and breaking down of rubber. A long storage time may affect the car's suspension level or contaminate its fuel.
• Older Technology
  It is possible that you will not get the latest technology and accessories with an older car. E.g. A newer car may have an engine with higher fuel efficiency than an older car.

Things to check before buying a new car

While buying a car with an older manufacturing date, you should ask a few questions and know about:

• New Variants

Check if a newer variant of the car is expected to come out in the future. Newer variants generally offer better performance due to a superior engine. Some offer better safety features like airbags and anti-theft devices. If these new features are a good add-on, do not go for the older car.

• Storage-related Problems

Ask the dealer where the car was stored. A car stored in poor conditions is far more likely to develop defects.

• Older Technology

Discover the reason why it is still unsold. One of the reasons could be that it is a low selling and unpopular model. If this is the case, find out why it is unpopular. E.g. With the difference between petrol and diesel prices coming down in India, some diesel variants may not be popular. You can go ahead with its purchase if you prefer diesel cars.

• Check the Car

You need to have an eye for detail while checking the car. Inspect the body to find whether the painter has faded. Check whether there is excessive dust on the car, indicating it had been kept in poor conditions. Find out if any foul smell is coming from the seats, the air conditioning, or the engine. Go for a test drive to see the working condition

Conclusion

Purchasing a new car with an older manufacturing date can offer financial advantages, such as discounts and immediate availability. However, weighing these benefits against potential downsides is imperative, including accelerated depreciation and possible warranty limitations.Set strict criteria for making this investment. If it meets your expectations after the above inspection, then move on to the next step. A good car, regardless of its manufacturing date, at a reasonable price is a fair deal. Also, don't forget to secure your car as well as your savings with a suitable car insurance policy and third party car insurance that guards your vehicle and financial health in the long run.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. 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.