The moment a brand-new car rolls out of the showroom, it loses 40% of its price-value. This reason alone makes a strong case for the used-car market.
The used car or pre-owned car market in India has experienced exponential growth over the years. The ratio of new to used vehicles was 1:1.3 in FY 2018. It essentially means that the demand for pre-owned cars was 1.3 times the new car market, which now has risen to 1:2.2.
The estimated value of the used-car market in India is at the staggering US $24.24 billion. Further, it projects growth of 15.12% in the next five years. As the society stopped stigmatising the purchase of pre-owned cars, the market witnessed waves of buyers. Therefore, we are penning this article that seeks to be the pre-owned car buying guide for you.
So, now that you have decided to buy a pre-owned car, let us lead you to the best in the market. And to do that, you need to ask a few questions to yourself first, which are:
Having a clear purpose of the car will help you stick to your budget. Suppose you are looking for a hatchback for your family of three. Don’t go for an SUV, not only because it comes at a slightly higher price tag. The maintenance and running cost of an SUV will be substantially higher than that of your hatchback. It will be a clear waste of money.
In the same manner, if your area of commute has terrible roads, you may need a vehicle with adequate ground clearance. In that case, opting for a sedan would not be a wise choice. Therefore, it’s imperative to keep in mind the objective of owning the vehicle.
Setting a budget before buying a used car is essential, and being steadfast in it is paramount. However, a room for budget stretchability can help you close better deals by spending a little more. To decide on your spending, keep in mind a few factors such as:
Further, if you are planning to take a loan to buy a pre-owned car, consider the interest rate. These days, most financial institutions provide a loan for purchasing a used car. Still, they charge a higher rate of interest. For that reason, opting for a shorter payback period may lower the interest rate to some extent.
We suggest you approach more than one financial institution and tally all the interest rates before zeroing in on one.
There are primarily three types of sellers from where you can buy a used car – a used car broker, an individual, and a franchise-based used car dealer. Traditionally, one buys a pre-owned car from people they know or trust.
Word of mouth has been a driving force for many. If you want to buy a pre-owned car, just let your friends and family know about it. Usually, they know someone who is planning to sell a used car. Also, some brokers deal in pre-owned cars, and you can choose to approach one of them.
These come under the umbrella of the unorganised pre-owned car market. Nonetheless, with more buyers pouring in, the used-car market in India has grown at a rapid pace. Big players like Mahindra First Choice Wheels, Maruti True Value, Hyundai H Promise, Toyota U-Trust, Honda Auto Terrace, OLX, Car24, Car Dekho, and Quikr have also entered the business.
With the introduction of such big names in the pre-owned car market, buyers now have the power to choose the best seller.
Although these big players like Maruti True Value and Mahindra First Choice charge a premium, they offer peace of mind. The cars that are available with them are inspected thoroughly by professionals, and the paperwork is, more or less, hassle-free.
However, if you intend to save some money and buy a pre-owned car from a broker, you have to take some precautions. Their salesmen are expert at smooth-talking and can lure you into buying a lemon instead of a good car. You can take the following steps to ensure you are not duped.
Though these bits of advice don’t ensure immunity from a cunning broker cheating you, it will certainly mitigate the risk.
Even though there is no uniform answer to this question, a car that has clocked less than 20,000 km on the odometer and is not much older than 2-3 years is a good bet. Nevertheless, try buying a pre-owned car that has not been discontinued by the manufacturer.
A model that is too old can drive you crazy with incurable troubles. Unavailability of spare parts becomes a difficulty in case of a repair. You are left with no choice but to fix after-market parts that are not genuine. These are the potential hazards you must factor in if you buy a car that is a bit too old.
That said, pre-owned cars that were very popular back in the day will generally have their parts available in the market, even after they have been discontinued. Maruti Suzuki cars, for instance, have been a hot favourite among buyers in the used-car market.
You can very well select a discontinued model only if it offers a considerable discount on the sticker price.
Anything that shines isn’t gold! Well, the saying is apt in case of buying a pre-owned car. Remember, you are buying a piece of machine that has been used previously, if not abused. The shining façade doesn’t ensure that everything is fair under the hood.
Suppose you are buying a used car from an individual or a pre-owned car broker. Check the vehicle thoroughly, and bring a mechanic with you. Keep an eye out for the tell-tale (also called a warning light) indicating any abuse, malfunction, or accident.
You can also visit the official website of the National Crime Record Bureau (NCRB) to find if the vehicle had met with an accident, was involved in a crime, or is a stolen one.
The plus point of buying a used car from a franchise dealer like Maruti True Value, Ford Assured, etc. is that the groundwork is carried out meticulously. In addition to all the mentioned steps and precautions, there are some general guideline for a pre-owned car buyer. These are:
Should the pre-owned vehicle claim to have Bajaj Allianz Motor Insurance, you can check the status of the insurance anytime.
In all honesty, buying a pre-owned car is more practical now than ever. But closing the best deal is undoubtedly a daunting task for many of us. You can use this article as a comprehensive guide to the entire process.