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New Car or Used Car - Advantages and Disadvantages

Modified On Aug 16, 2014 01:15 PM By Bala Subramaniam

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Buying a car is a long process. No one just decides and buy a car that fast. There are lots of questions to be answered, people to talk to and choices to be made. And everything starts with the question - to buy a new car or an old one? Price, value, financing, maintenance, safety - there are lots of factors to be considered to choose either. We list out the advantages and disadvantages of both new cars and used cars to try help you make the decision easier.

New Car or Used Car - Advantages and Disadvantages

Buying a new car


You are the first - First benefit of buying a new car is you will be its first owner. The car is new, without any unknown repairs or faults, has no wear and tear, hasn’t been in any accident and you get that new car smell.

Almost no maintenance cost initially - Depending upon the manufacturer, you have to pay almost no maintenance cost upon each service, apart from the oil change charges. Most of the car brands now offer warranties up to three years and more for you to relax if something goes wrong. On the other hand, a used car will need regular maintenance right from you buy it. Between oil changes and other mechanical repairs that might be required, a used hatchback can empty your wallet between Rs.1500 to Rs.4500 every month on an average while the amount grows to Rs.2500 to Rs.5500 for a used mid-level sedan.

Latest gadgets - These days, technology is getting updated daily and what was hot last month may be tagged as prehistoric next month. New car means the gadgets it comes with are also new and most of the times, you may not end up looking for aftermarket accessories.

Safety - As far as India in concerned, safety always takes a back seat. The necessary rules are not present but the car manufacturers are now making more efforts to make their cars safer. Things like dual front airbags and ABS are becoming standard features. So a new car will surely equate better safety.

Better fuel economy - Thanks to the growth of technology and the years of R&D the carmakers have put in, the new cars come with better fuel economies. A brand new petrol hatchback will run up to 20 kmpl for every litre of petrol it drinks and a diesel hatchback will better the number by returning up to 25 kmpl per litre. Compare that to the same segment of cars a few years back and those cars will return around 13 to 15 kmpl per litre for the petrol variants and 15-18 kmpl for the diesel ones. Not to forget lower CO2 emissions in the new cars also.

Financing - Getting loans from banks and finance companies at better rates are easier with new cars as they are worth more without the worries of depreciation.


Cost - When buying a new car, the cost will be high. If you are buying a new car with full payment, the cost is a significant amount and if you are opting for financing solutions, the brunt will be felt through the interest rates and EMIs.

Depreciation - Regardless of what you buy is a new car, the minute you drive it away from the showroom, the car starts depreciating in value.

Buying a used car


Cost - This is the major differential between a new car and a used car. For the same cost of a new car, you can buy a used car from a couple of segments above. Imagine getting a D-segment car for the price of top-end premium hatchback. Today, a new Hyundai i20 petrol will cost anywhere between Rs.5.2 lakhs and Rs.8 lakhs. For the same price range, you can get a 2007 Honda Civic, a 2009 Volkswagen Jetta or a 2008 Mahindra Xylo. Now that’s more car for less money.

Depreciation - When you decide to sell your car, the depreciation value is lesser on a used car than a new one, as most of the depreciation happens in the first two or three years.

Insurance and Finance - While it’s true that it’s harder to get financing as easily as a new car, you get to pay a lot lesser in the case of used cars. The same goes for insurance too as you will be paying a lesser insurance bill.

Choice - We are not telling there is a lesser range of variety available for new cars, but it’s just that the range is much wider for used cars. The bigger the price range that you are ready to spend, the bigger the range.


Old - How much ever advantage or benefit you get from buying a used car, in the end, the car is old. It has already been used by someone and you have to drive with it. The design, features and gadgets will also be old.

Maintenance - While you will be saving on lesser down payment and insurance costs, a used car comes with years of wear and tear in its parts and thousands of kilometers in its odo. That equals more time and money for maintenance. The accidents the car has been in and the scratches and dents are added bonus.

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