A shiny new car is surely an attractive option. It comes with the latest safety features, minimum flaws and can offer better mileage. But you might be reluctant to invest in a brand-new vehicle at the moment since it does not sound like a financially wise decision amid a pandemic. It is especially true if you do not wish to splurge and save money for the upcoming days. A used car with a loan for second hand car could be a smart decision.
No wonder India’s used car market was valued at $27 billion in 2020 and is fore casted to reach $50 billion by 2026 growing at a CAGR of 15% during this period. Take a look at how you could benefit from buying a pre-loved car.
1. Depreciation Value
A new car can drop 50% of its value within the initial three years of ownership. Some might lose as much as 30% in the first year itself. So,a new model might not qualify as a good investment if it is losing money so quickly. This puts them in a disadvantageous position than old cars. On the flip side, the amount being paid for pre-owned vehicles is automatically worth it. It is because the depreciation has already occurred. This car will lose its value at a slower pace than a new one which ensures a better loan-to-value ratio for a used car loan.
2. Thoroughly Inspected
A used car will be meticulously checked and refurbished before handing over. This is usually done by certified professionals. It will assure that the vehicle is of high quality and offer a great bang for bucks. You can also enjoy low-cost maintenance, free maintenance and an extended warranty. Low dealership fees are another major benefit here. This is not the case for new vehicles since they are simply sold on the ‘assurance’ or ‘promise’ of being new.
3. Low Insurance Costs
Newer the car, the higher the amount shelled out in case of an accident. A second-hand car has already depreciated. The parts are old and will not cost much to repair or replace. An insurance company, therefore, does not have to pay a hefty amount when the vehicle is damaged. You too do not have to pay a lump sum amount to insure the car.Neither do you have to use a portion of the loan for second-hand car since an insurance partner will not refuse to pay the entire cost of the wreck.
4. Lower Registration Fees
Many states usually charge minimal fees when re-registering a car under your name. This is because the amounts depend on car age. You can also enjoy reduced taxes. Further, the higher the number of ownership changes, the lower the vehicle price. This can further make it an affordable purchase in the long run.
5. Vehicle History Report
Even the newest car models come with certain risks. For example, under powered engines are common issues. But you can receive a history report with an old car. This mainly includes title status, mileage, car ownership details and accident history, if any. These are valuable information that can help you get low-cost insurances. Plus, it offers peace of mind from knowing all the details of the vehicle beforehand. Bad history can also keep you from buying a bad car and wasting your second-hand car loan.
Pick a bank offering a low car loan interest rate to help plan your purchase better. You can benefit from pocket-friendly EMIs for a comfortable repayment experience.