If you are a first time buyer or a new driver, there’s always the dilemma of splurging for a brand new car or opting for a used one until you are confident enough to pick up a new one. There are advantages to both – buying a new car or buying a used car. We list out the pros and cons of both situations for first time buyers to help you make an informed decision.
There’s a caveat here – a first-time buyer need not necessarily be a new or novice driver. It may be that it’s the first time he is owning a car, so not all the points would necessarily apply universally. First let’s take a look at the pros and cons of buying a new car.
Pros of buying a new car for a first time buyer
* You get a new car, obviously! Duh! The thrill of getting a new car is that you can maintain it the way you want and decide what you want to do with it from day one.
* You get better fit and finish with a brand new car and of course, that new car scent is something to be cherished.
* You get full warranty coverage and peace of mind depending on the tenure of the coverage
* You don’t have to get a pollution under control certificate for at least a year.
* You get the latest model in town, and have the freedom to drive it around for at least 15 years if you so desire.
* If you are buying it in a company’s name, the company can claim full depreciation benefits on the car to save on taxes.
* Loans are more easily available and at lower interest rates for new cars.
Cons of buying a new car for a first-time buyer
* That first dent or scratch on the car is going to really hurt, especially if you are a novice driver
* Insurance premium would be far higher on a brand new car than on a used car.
* You cannot fit any accessory you like for fear of the warranty becoming void on the new car.
* You cannot take the car to a inexpensive mechanic and will have to stick to the authorised service centre for all repairs, however expensive they may be.
* If you are not comfortable with the car for some reason after having bought it, selling it immediately would knock of at least 10 per cent of its value immediately.
Well, the cons of buying a new car are not really that strong, but if you are a first-time buyer, generally people recommend you pick up a used car to hone your skills before switching to a new car. However, a used car may not be a great idea at all times. Here are the pros and cons of picking up a used car for a first-time buyer
Pros of buying a used car for a first-time buyer
* Purchase cost is not going to be that high. You will probably get a bigger car for a limited budget and you could opt for one that is safer as well.
* Insurance premiums on used cars would be on the depreciated value and hence not that high as well.
* The pain of having to repair a ding or a dent would not hurt as much as having to do the same on a new car.
* If the car is already out of warranty, you can get cheaper service by visiting a reputed local mechanic instead of the authorised service station.
* Since your entry costs into the world of driving were lower, you have the option of re-selling the car in a shorter period of time and trading up or upgrading laterally to a new car once you have gained confidence in your driving skills.
Cons of buying a used car for a first-time buyer
* If you are buying a car on finance, loans for used cars are generally at a higher interest rate than those offered for new cars.
* If you are buying a car in a company’s name, the depreciation you can claim on a used car will be far less than that on a new car and hence the tax benefits would be limited.
* Higher maintenance costs may be a factor with used cars depending on who the previous owner was and how many kilometres the car has already run
* The car is not likely to be the latest model in town. So if image matters to you, this may be a concern.
* Finding the right kind of car would take a lot of research and test drives with multiple dealer lots. Every car would be different and it is difficult to gauge the history of the car – not all car dealers can be trusted.
Are you a first-time car buyer or do you have some handy tips for first-time car buyers? Share them in the comments below.