Should I Buy A New Car or Second Hand / Used Car?
I being a Finance person and an Investment advisor, am used to analyzing every investment from a risk-reward angle. This applies to any and every asset class, including automobiles.
Right from my adolescence, I have been passionate about driving cars. As soon as I turned 18, I took my driving license and since then there has been never looking back. My dad always believed in buying first-hand cars. He was so emotionally attached to his first-hand car, that he drove his Honda City for 10 years. But I was never keen on driving the same car for 10 years. I wanted change; a change every 3 years; a change which was ahead of times; a change that would make people envy, a change that was rewarding; a change that needed comparatively less capital investment.
That is when the idea of buying second-hand cars strike me hard. My husband also being a finance person completely supported this idea.
In 2007, when we got married, we were a middle-class couple. However, we both were passionate about driving great cars. But at the age of 25, buying a first-hand car was like an unachievable dream. We both had just started our jobs. Hence savings were very limited. So we both decided to buy a second-hand car, Esteem. Everyone around us was happy and shocked, at the same time. Happy, because we bought the car and Shocked because we bought an Esteem, which was one of the top-end cars back then.
Since then and to date, we have bought and sold 9 second-hand cars, right from Hyundai Santro to Honda Civic to Mercedes C-class. Today at the age of 40, we own a second-hand Mercedes C-class and first-hand Creta. We have always had a satisfying driving pleasure with all our cars.
Many middle-class people cannot afford high-end first-hand cars. At the same time, they feel buying a second-hand car is below their status or dignity. This is a common misconception which, I would like to make an effort, to change.
The first advantage is you get a good car but at a lesser value.
2. The second advantage of a second-hand car is that you can buy a much bigger brand than what your status can afford.
3. The third advantage is to use the car for 2-3 years and then sell the car. You can again buy a new second-hand car and so on. This is how we enjoyed driving the 9 best cars of the respective times, in 15 years.
4. The fourth advantage is, there is little emotional value attached to the car while selling it. The excitement of getting a better model is much more than the loss of the old car.
There are certain key points that we should check and enquire about before buying second-hand cars. Decide your budget and then we are good to go:
Good Dealer: Choose a small-scale dealer, who deals in only quality cars. Such dealers always have stock of well-maintained cars. They also maintain the cars in very good condition before selling to the customers, almost looking like brand new cars.
Such dealers always offer great after-sale service on the cars sold by them because they have to beat their competitors who are big car dealers.
Generally, rich people owning high-end cars, sell their cars to such small dealers because they get good value for their cars as compared to big dealers.
2. Age of the car: Buy such cars which are not more than three years old. Such cars are in their optimum performance period and offer great driving pleasure. Such cars have minimum to low maintenance. Just the regular servicing is more than enough.
3. There is a belief that second-hand cars will give more maintenance and repair headaches than first-hand cars. To avoid this, I have suggested buying cars from good small dealers who always keep well-maintained cars in their stock. These dealers know the car owners personally; hence they only keep such cars for sale which are well maintained by the previous owner.
4. Also one should not forget that even first-hand cars can require repairs and maintenance. The only difference is that first-hand cars are in the warranty period for the first two years and hence certain repairs and replacements are free of cost. From the third year, whether it is a first-hand car or a used car, you have to bear the costs, if required.
In a Nutshell,
Never forget, “It is the Car that you Drive that matters, Not First Hand or Second Hand.”
2. Sit back and think for yourself, “Are you better off owning a car or not owning one.”
3. Will your relatives compliment you for having a car or not having one?
Today I get compliments for owning my Mercedes C-class, that is all that matters.
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