A car, whether new or used, is considered a valuable asset by almost every owner. The used car market in India has witnessed rapid growth over time. Many new drivers prefer to buy a used car before a brand new one. However, everyone has the question of whether they should buy a used car at some point. Generally, buying a used car is a wise choice. The reasons for this will be examined in this article. But before that, you need to know that there are many factors to consider when buying a used car, but for this you also need to be careful when buying a motor insurance policy.
Used car insurance is just as important as new car insurance. The idea and purpose behind protecting your vehicle from unforeseen risks is the same. Under the Motor Vehicles Act 2019, it is illegal to drive any new or used vehicle without at least one third party insurance policy. Here are a few reasons why you should buy a good used car and buy car insurance for it:
- Value for money
Used cars come with a lower price tag and offer much better value for the amount paid. You can compare numerous models from various used car dealers and choose the model according to your needs. While doing this, compare the prices offered and choose the dealer that offers the best price for the vehicle. If you are buying from a private seller, you may get a better price as there are no commissions to be paid to agents. You can get a car loan to finance your used car purchase and take your dream car home. Also, with car insurance, you get the convenience of interacting with your insurance provider through a car insurance app.
- Slow depreciation rate
The biggest downside to buying a new car is that it depreciates in value once it’s taken out of the showroom. In the first years of the car, its market value drops very quickly. Therefore, you can avoid this huge depreciation by choosing a used vehicle. While a used car will lose value, you will lose money less quickly.
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- Lower insurance and registration fees
The insurance rate usually depends on the age of the car. The newer the vehicle, the higher the insurance cost and vice versa. Therefore, the insurance rate for second-hand vehicles is lower. Besides insurance, you’ll also have to pay a lower amount for registration fees. Purchasing a used car reduces the cost of registration, as the cost of registration depends on the transaction price of the vehicle.
- Higher inflation
Considering that the inflation rate has increased, consumers have to bear the burden as the high cost is passed on to them. Automakers charge higher prices for new models. To hedge against such rising prices, buying a used vehicle is a safer option. Also, you can usually have your vehicle repaired for a lower price in case of damage. This also helps you keep your no-claim bonus.
- Lower loan amount to borrow
Since used cars come with a lower price tag, the amount you may need to borrow will be lower. Many financial institutions offer used car loans with higher borrowing amounts and attractive interest rates. Competitive interest rates suggest that a lower amount should be repaid in Equal Monthly Installments (EMIs). You can get a used car loan and buy a used car without any financial difficulties. Given that cars are now needed for daily travel, investing in a used car is a wise decision.