New or old - what car to buy?

This is probably one of the first questions that worries most car buyers when they decide on buying a car. A new car is always a very enticing option, but financially it may not always be a viable choice. For someone who is new to driving a car, a brand new car means he/she will have to be extra careful as damage and repair for new cars certainly cost much more to fix than for used cars. There are plenty of considerations that go into purchasing a car and every aspect needs to be carefully thought over. Let’s first take a look at the benefits and disadvantages of buying an used car.

Used car - pros

+ Doesn’t empty your bank balance as much as a new car, which means for the same
amount of money, you can consider a model from a higher segment.
+ Value depreciation of used cars is considerably less compared to a brand new model.
+ Lower depreciation translates into better resale value if and when you decide to sell the
car.
+ Used cars also attract lower insurance premiums than new cars.

Used car - cons
- A used car will have less equipment than the latest model, which means lower levels of
creature comforts and less safety features.
- Another major drawback is tracing the history of a used car with regards to its
maintenance and service.
- Maintaining a used car is usually more expensive than a new one, resulting in higher
ownership costs over longer periods.
- Correct and spotless documentation of a used car is also difficult to come by, due to the
lack of clear and clean paperwork as regards accident history and legal matters.

New car - pros
+ Nothing comes close to the pleasure and the pride of ownership of a brand new car.
+ There is no worry as regards legal issues or accident history.
+ It’s the latest model in the market and hence it is feature-rich and loaded with latest
technologies and updated safety equipment.
+ There is a comprehensive warranty with a new car for a considerable period of time or
based on total kilometres, offering good value and peace of mind to the buyer.

New car - cons
- A new car will always be a lot more expensive than a used model.
- A new car will depreciate much higher and quicker than a used car.
- The insurance premium costs of a new car are significantly higher than for used cars.

TIP: If you plan to own a car for over 5 years, then it is advisable to buy a new car with extended warranty and use it well so that you get excellent resale value. However, if you plan to keep a car for just 1 or 2 years, then it's better to buy a second hand car from a known source and tested by a reliable mechanic whose integrity is not doubtful.