Planning to buy a car? Should you go for brand new or used?

Buying a car can be a tough, confusing decision. For starters, there are several brands to choose from, and when you zero in on one, you then move to selecting a car model. Even when it comes to car models, each has different variants to compare. But before you even get to this part of the process, you need to consider if you want a new car or a used car one. There is no easy answer to this, and a lot will depend on what you expect from your car and how much you want to spend. So, let us look at some of the parameters that differentiate between new and used cars to help with this decision.

Cost of the Purchase:

It is obvious that a new car has a much higher price tag than a used car. Additionally, with a used car, you do not have to pay registration charges, RTO fees, road taxes etc., as these fees are already paid by the original buyer. Since a used car is likely to be a model that was released and bought a few years ago, the depreciation of the car tends to play a part in its resale value.

Maintenance Costs:

The maintenance cost of a new car is usually lower as there would be no prior wear and tear. Besides, you might be offered free servicing for the first few years, which will further lower maintenance costs. A well-maintained car may have a lower maintenance cost, while you may inherit heavy maintenance expenses on a recklessly driven car. Irrespective of the car’s condition, routine replacements like a change of tyres and suspensions would be required sooner in a used car. 

A well-maintained car can perform wonderfully well on the roads, and what complements it the best is the IDFC FIRST Bank FASTag, FIRSTForward. Pay for parking only at select places and avail of monthly passes with an auto-renewal option. 

Cost of Borrowing:

Banks and lending institutions generally charge a higher rate of interest on a used car. So, you may end up paying a higher interest amount. However, the cost of a used car would still be much lower than a new one, which means your overall debt would be low as well. Interest costs and favourable loan terms are perhaps the most vital factors, which is why you need to choose your car loan provider carefully. IDFC FIRST Bank Pre-owned Car Loans offer up to seven years of loan tenure, and you can avail of up to Rs 12 lakh worth of loan in less than half an hour! Additionally, there would be no hypothecation on your car, an industry-first offering.

Depreciation:

A new car depreciates faster in its value. This is why used cars are cheaper in the first place. If you consider a 20% depreciation rate, a Rs 6 lakh car can lose half of its value in four to five years. A used car is already depreciated, so its resale value doesn’t change drastically in a year or two.

Features:

A brand new car would have all the latest features in the segment. The same cannot be said for a used car. If you are specific about the latest features, a used car is likely to disappoint you as its features would be at least a few years old.

The good news is that if your heart is set on a shiny brand new car, IDFC FIRST Bank Car Loans is an ideal way to fund the purchase. These loans start at an interest rate of 7.49% and can cover up to 100% of the car value. Like pre-owned car loans, IDFC FIRST Bank Car Loan offers a convenient repayment tenure of up to 10 years. Be it a new car or a used car, IDFC FIRST Bank offers you suitable financing options to make your dream car a reality.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.