We all been there at some point in life when we decide to buy a car. After your own house, an own car is something everyone would think about. In India car is a status symbol for many, a car and a house are two things that every Indian would dream of. Since India is a huge market for an automobile, there are lots of car brands that are available to choose from depending on the budget. But when you decide to buy a car, you always get this thought to buy a new car or a used one?
Well it all depends on one thing , that is how much money you have with you ?
Money is one factor which is always common people consider when we buy anything.
In India, we always go for “cheap and best “ yes we are a little greedy on this. We want the best quality for the lowest price.
It is contradicting but that how we common people think .
When I first decided to buy a car for myself, I wrote down things I need and I could manage to afford. This is the first step I advise everyone to do, write down your requirements.
So, my requirements were a medium-size car, good mileage, driving comfort, low on maintenance, and on a budget.
I also decided the loan EMI shouldn’t be more than 10% of my salary.
All the condition was covered with a hatch back from Suzuki, now i have to decide weather I should buy a new car or a used car ???
To crack this decision, I went on to see used cars and the budget, the advantage of buying a used car will be like you can you get a top-end model for a better price, whereas if I go for a new car with the same budget I can buy a base version with limited features.
So now I know the budget of a used car, the next comes how much cash I have ??
Actually, this should have been the first and foremost concern before we buy a car, how much cash we have ??
In my scenario, I had 1/3rd of the money to buy a car, and the rest I planned to avail the loan.
This was the turning point for my decision.
So if I pay 1/3rd of the money and avail a loan for a used car the interest % for the loan will be around 14%. That is the interest rate banks give on used cars.
But if i choose to buy the same car as a brand new with the same money, and avail a loan for it , the interest rate would be 7-9 % ( Depending on your credit score )
So when i worked out the EMI for the new car and the used car , I was paying less EMI for the new car than the used car
The only compromise I had to do is it go for the base version of the car, in order to keep the budget.
I saved a huge money on my EMI
Huge money on my maintenance, like for the next 3 years it will be hassle-free to use a new car other than a regular oil change. Unless you drive with negligence or an accident occurs.
And a satisfaction of buying a new car .
If I had the full cash to buy a car, I would have opted to buy a used car which would have saved me more money.
Since I was choosing to avail a loan, used card wasn’t a right option for me .
But for people who have full cash to buy a used car would be the best option to save some money.
It all depends on your budget and usage, you want to buy a car with full cash where your usage is minimum, I would suggest you buy a used car.
If your usage is more and you have less cash try to buy a new car, so that you can avail of a good loan on a lesser EMI and save money on your maintenance.
Write down your requirements and factors to choose the car you have to buy, you will save more money when you do the best buy.
Stay tuned !!!!
