Should you buy a second-hand car instead of a new car?
Should you buy a second-hand car instead of a new car?
Through a valid CAR INSURANCE, an insurance provider guarantees cover for any damages or losses incurred by the insured vehicle or to the owner/passengers of the vehicle. Third-party car insurance is mandatory in India according to the Motor Vehicles Act, 1988 irrespective of the car being new or second-hand. It will help in providing cover against the losses/damages incurred by a third party person or vehicle during an accident. A comprehensive car insurance policy will help in providing cover for the repair or replacement of the car in case of an accident, theft, vandalism or any natural calamities.
In the year 2017-18, the growth in the sales of new cars was 2.7%, which was the slowest in the last 4 years. This growth rate shows the current shift of interest from new cars to second-hand cars. This shift of interest proves that there are a lot of advantages associated with the purchase of second-hand cars.
Benefits of purchasing a second-hand car
Let us have a look at some of the major benefits which are associated with the purchase of second-hand cars.
Minimisation of depreciation of car
The value of a car starts depreciating from the moment it is driven out of the showroom. The market value of a car will reduce by around 20% every year for during the initial years of purchase. By the end of 3 years, a new car is supposed to have lost around 50% of its market value. This depreciation of the car value can be avoided by purchasing a second-hand car as you’ll be able to purchase post such depreciation and the value will not lower much in the upcoming period.
Avoiding registration
During the purchase of a new car, have to make numerous payments to the Government such as road taxes, registration fees, charges to the RTO, etc. When you purchase a second-hand car, you will not have to make any of these payments associated with registration fees or RTO charges as they would have already been paid by the previous owner.
Reduced rates of car insurance premium
The calculation of car insurance premium is done based on the market value of the car. Thus, a new car will have higherpremiums unlike a second-hand car, which has undergone depreciation. So, the insurance premium charged for a second-hand car is lower than that of a brand new car.
Affordable prices
Purchasing a second-hand car increases the range of models you can choose from. If a stylish sedan wasn’t in your budget earlier, opting for second hand cars can expand your choices now that you can selected from a higher-end models that are available for reduced prices.
Add-on installation at no additional prices
Numerous drivers add many extra add-ons into the car such as bumper-guards, windscreens, alloy wheels, etc. which tend to provide additional protection to the car and also make the car look good. These features, when installed in a new car, will be very expensive whereas they are already present in a second-hand car and help you save installation costs.
Conclusion
While the purchase of a second-hand carmay be time consuming as it requires thorough research, you are sure to enjoy the benefits starting from the price to the long-term costs.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.
This blog has been written by
Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry
A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.
Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 6,800+ network garages, you can be assured of help in event of any damage to your vehicle
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