Advice

The 'not-so-obvious' advantages to buying pre-owned cars

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So, we all know the obvious advantages to buying used cars (primarily, price). They are all highlighted in the main thread (Buying a New Car vs Used Car).

But what about the not-so-obvious advantages that no one really talks about? As someone who's a big fan of pre-worshipped cars and has bought 5 already, let me line up some of them. Please add to this list with the ones you think of.

not-so-obvious advantage #1
You can REDLINE from day 1! No need to baby the car, no need to run it in (related article). Heck, you can burn some rubber right from when you're driving out of the previous owner's parking lot. A used car is already bedded in.

not-so-obvious advantage #2
Remember how you winced when your shiny new car got its first scratch? You won't with a pre-worshipped ride. Drive a car in Bombay for 3 months and it'll have beauty marks all over. Guaranteed. Because you are buying a car with a fair share of existing battle scars, a new ding won't bother you. Odds are, you won't even notice them.

not-so-obvious advantage #3
Beat the tax hikes! New Budget giving you the blues (related thread)? Don't worry about the ever increasing excise duties, infrastructure cess etc. announced by our FM every year. Used cars are largely unaffected by them. If anything, moves like compulsory TCS actually soften demand (i.e. better prices).

not-so-obvious advantage #4
Buy a SAFER car for the same $$$! Want safety for your family at 3.5 lakhs? Dream on in the new car market. In the pre-owned space however, you can buy a sturdy VW Polo with dual airbags or a 6-airbag Hyundai i20. A Rs. 9 lakh Swift Dzire won't do much of a job protecting you in a crash; your odds of getting away unharmed greatly increase in a pre-owned 9 lakh Jetta which has an impeccable safety record. Whatever the budget, I can find you a safer car in the used market. You can safely ignore the NCAP failures & untested tin cans.

not-so-obvious advantage #5
Stay up-to-date for a longer time! Irrespective of the price band, a pre-owned car at the same price will be bigger, faster, safer, have additional kit & technology, more cabin space, higher levels of refinement, superior handling, beefier brakes & more. Why? Simply because a used car is generally from a segment or two higher than a new car at the same price point. Translated, your car won't get outdated anytime soon. Compare a 2016 Rapid to a 2013 Skoda Octavia, or a 2016 Toyota Etios to a 2012 Toyota Corolla and you'll get what I'm talking about. 5 years down, the Rapid & Etios will feel outdated; the Octavia & Corolla won't. Another example: I could be happily driving my Civic today - it's still quick, safe & spacious by current standards. Not the case with a 2010 Dzire which would've cost me the same $$$. The dude who bought my C220 is driving a sedan that's faster, safer, dynamically richer & more solid than anything in the mass market.

not-so-obvious advantage #6
Double bonanza! You save at the time of buying...as well as selling. Used cars are not only cheaper to buy, they are also far cheaper to own as you've bought an already-depreciated asset. As an example, I bought my <4,000 km City Vtec for 7 lakhs + change (saving 2.8 lakhs off the cost of new). I sold her when she was 7.xx years old for 3.5 lakhs, losing about 3.5 lakhs in depreciation. If I'd have bought a new City, my depreciation loss would be at least 6 lakhs, if not more. That's not even counting the opportunity cost of the 2.7 lakhs I saved when buying her used. Or take my 530d as an example - In 1.5 years of using her, I've lost about 3.xx lakhs in depreciation. If I'd bought an obscenely overpriced new 530d, I'd have lost a minimum of 20 lakhs in depreciation. This point is especially applicable to cars priced over 15 lakhs as they are all depreciation disasters. The fat girls sink & how!

not-so-obvious advantage #7
Upgrade faster! Because you are buying a heavily depreciated asset, you can sell it earlier without the fear of losing too much $$$. Used cars shed their value slower than new ones because depreciation is the steepest in the first 3 years of a car's life. If you like changing your rides often, used is better for you as you'll lose lesser moolah at the time of resale. Also consider lateral upgrades (ARTICLE: The Beauty of Lateral Upgrades).

not-so-obvious advantage #8
Extended warranties that meet or beat standard new car warranties! Extended warranties are a used car owner's wet dream. Honda now offers warranties up to 7 years (link), BMW does for 6 years & many others do for 5 years. Considering that most new cars have standard warranties of between 2 - 3 years, this is like having your cake and eating it too. The last 3 pre-owned cars I bought were still new enough to be in the factory warranty, and I got extended coverage on all of them. My risk was effectively zero. Of course, if you buy a new car, you get that many more years of coverage, but there's no denying that the l-o-n-g extended packages make the pre-worshipped deal extremely safe.

not-so-obvious advantage #9
Modify on day 1! Not only can you redline the car from the time of delivery, you can also drive it straight to your tuner. This isn't the case with a new car where few owners will do anything to mess up the standard warranty. Of course, it isn't the case if you get an extended warranty on your used car either. But considering the average age of a used car in India is 4 years (related analysis), this point is applicable to most pre-owned examples.

not-so-obvious advantage #10
It's not just cheaper, stupid. It's better value! When you buy new, you are paying 100% of the price for a car that has 100% of its life left. Sounds like an even deal to me. On the other hand, when I bought my Civic, I paid 57% for a Honda that had 95% of its life left. Now who's the wiser? Similarly, I bought my 1.5 year old 530d for almost half of its MRP at the time. Since it had 19,000 km on the clock, we can safely assume that at least 90% of its life is left for me to use. In other words, ~50% of the price got me 90% of the utility. It's not just about used cars being cheaper - they offer FAR SUPERIOR VALUE. You know how we're always complaining about cars in India being so much more expensive than say, the USA? Look for depreciation disasters and you'll be buying cars at prices comparable to American ones (e.g. my Civic). Prices in the used car market are a lot more dynamic than in the new segment. In the former, the market decides the price. In the latter, it's the manufacturer.

not-so-obvious advantage #11
Used cars are better today...than they've ever been! Reason? New cars are getting better every year! The competence levels, quality & durability of new cars are ever increasing, and this has a direct effect on the used car market. As an example, a 3 year old Hyundai Verna in 2009 was nothing to write home about. It looked ugly, handled poorly, had awfully bouncy ride quality and had boring interiors. On the flip side, a 3 year old Fluidic Verna today is a far more impressive sedan. This is applicable across the board because - you guessed it - new cars today are ever improving. A 3 year old car in 2016 feels decidedly tighter & superior than whatever 3 year old cars we saw in 2006.

not-so-obvious advantage #12
Super easy to gauge whether the car is a lemon or not! When you buy a new car, you have no way of knowing how it'll perform in the longer term (although there's absolutely no denying that new is safer). With used cars, that's easy to gauge. You see, lemons show their true colours very early in life. My C180 was a lemon and it was obvious within 25,000 km; likewise with our wretched Tata Indigo. Just take a look at the service history of the car and what kind of replacements it's had. I've followed the best practices listed in this article & relished each pre-owned car purchase. Sure, it requires effort, but if a weekend of work (background checks, PPI) saves me a couple of lakhs, I'm game anytime. Ironically, the only lemons I've owned have been new cars, not used .

not-so-obvious advantage #13
Used car loans don't have to be that expensive! Gone are the days of used car loans costing a whopping 18%. Take a loan against your FD at +1 or 2% (related thread) for cheap financing. No FD? No problem. If you have maintained a good credit score (i.e. CIBIL) and / or have a longstanding relationship with your bank, you can easily get used car loans in the 12-12.5% range. Some websites show me ICICI giving personal loans at rates as low as 11.49%. And remember, after the demonetisation drive, the liquidity in the banking system has gone up by 11 lakh crores!! With so much money in the system, interest rates are bound to fall further.

not-so-obvious advantage #14
It doesn't have to take that long! A decade back, finding a used car meant making multiple calls to your friendly brokers & endlessly screening newspapers. Admittedly, the process was cumbersome & boring. Now, with a plethora of classifieds websites, it's easy as pie. What's more, you can set up convenient Google Alerts too (e.g. used Ford Endeavour in Mumbai). The last two pre-worshipped cars I bought, it took me between 30 - 60 days to zero in on the right piece. That's a lot less than the waiting period on some popular new cars!!

not-so-obvious advantage #15
Enthusiast cars go cheap! You'll realise it's a good thing that enthusiasts don't see eye to eye with the layman. The Laura vRS moves much slower than a Laura TDI, and it's a similar story with the Octavia TSI vs TDI. Manual high-speed German? Few people want a 6-speed C220 MT. Fiesta 1.6? Ditto. Accord V6? Sells for the same price as an Accord I4. Linea T-Jet? Most buyers won't even walk close to one, leave aside test-driving it. Wait for the S-Cross to start hitting the used market and you'll see the 1.6L commanding a small premium (at best) over the 1.3L. Don't show your enthusiasm and you can get a good deal on these. Additionally, if you want true gems that are no longer in production (e.g. MM550 NGCS or 6-cylinder 3-Series), the pre-owned market is your only source. Am sure that one day, new car showrooms will only have electric / hydrogen / whatever cars and if you want to buy a high-revving petrol or quick diesel, the used market will be your sole option.

not-so-obvious advantage #16
The sheer variety! Whatever the budget you have for a pre-owned car, the choice of models will be at least thrice that of new cars at the same price point. As an example, someone with 6 lakhs in his pocket can only consider hatchbacks & a handful of compact sedans among new cars. In the used car market however, over & above hatchbacks & entry-level sedans, I could find him powerful C2 segment sedans (e.g. City, Verna), SUVs (e.g. EcoSport, Duster), MPVs (e.g. Ertiga), 4x4s (e.g. Thar, Gypsy) and so on. When I was recently shopping for a 530d, there were probably about 20 new cars that fell in the same budget. On the other hand, the pre-worshipped market gave me a choice of 200 models (including V8 petrols & V10 diesels!!).

 
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