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Tata Capital > Blog > Loan for Vehicle > Expert Advice on Pros and Cons of Buying New vs. Used cars

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Expert Advice on Pros and Cons of Buying New vs. Used cars

Expert Advice on Pros and Cons of Buying New vs. Used cars

Are you confused? Used car or a new car? What should you buy? What are their advantages and disadvantages? Which one suits you the most? If you have the above questions on your mid, this article is surely for you. Different people have a different set of needs and preferences. We have compiled the advantages and disadvantages of buying a new car vs. an old one to enable you to take an informed and smart decision.

Advantages of Buying a New Car

1.    You get the latest model, features, up- to- date gadgets, safety equipment, and technology.

2.    You are the first owner and therefore you don’t face any mechanical problem from the past.

3.    You get a comprehensive warranty at the time of purchase and hence you always have someone to bank upon in case of any failure or problem.

4.    You get discounts and rebates.

Disadvantages of Buying a New Car

1.    The biggest cons of buying a new car are its price. You end up paying a huge amount which you would have been able to save to a great extent if opted for a used car.

2.    The depreciation value for a new car is more than that of a used car. The price will decrease the by 20- 30 % the moment you buy it.

3.    The insurance cost will be higher for a new car. Plus you will also spend more on installing anti-theft equipment.

Advantages of a Used Car

1.    A used car is quite affordable as the price is much lesser than a new car. At the price of a new car, you can get a higher model or can be able to add a luxurious edge.

2.    The depreciation in a used car is considerably less than that of a new car. Hence, it retains most of its original value when you want to resell it.

3.    The insurance premiums for used vehicles are comparatively less.

Disadvantages of a Used Car

1.    After all, it is an old car and will not be up-to-date with looks, features, technology, safety measures, gadgets, and more.

2.    You need to pay higher maintenance and service costs.

3.    A car loan is not that cheap, although the amount can be less. For used cars, interest rates are higher as compared to the new ones. In the case of used car loans, the loan amount depends on a number of factors like the condition of the car and only 70-85 percent of the car cost. However, in the case of new car loans, the loan amount disbursed can be about 90-100 percent of the car value!

4.    The interest rates associated with used car loans are on a higher side which significantly increases the overall cost of purchasing a used car. Also, unlike new car loans, the repayment period for used car loans is limited and shorter. Thus, depending on the loan amount and the repayment period that is allowed, the EMI might be on a higher side than that of new cars. Whatever may be the pros and cons of buying used and new cars, it is left to the owner to decide the same, depending on the availability of budget.