Every single car we have owned were used cars. And we bought 5 cars so far in our adult life. I am not here to argue whether buying a used car is better than a new car or vice-versa. It is just my opinion and I am sure the counter arguments are as strong. Here are some reasons why we went this route even before we went down the minimalism path.
1. Cost of a new car
The biggest hurdle has always been the cost of a new car. I never liked the idea of taking a loan to buy a car. On the other hand we did not have the kind of money needed to buy a new car when we got our first job. So both of us started out with a used car in the US as our first car. Later when we moved to India, we saw the need for a car pretty quickly. Again, we have not accumulated enough to buy a new car.
Eventually when we were looking for a second car, we could afford a new car but decided to go with a used car because by that time we have realized the benefits of a used car over a new one (see below). Used cars end up costing about half the price of a new car. What we noticed is that in the US a used car sells closer to one-third the price of a new car after about 5 years. While in India they sell for around half the price. Even then I still think it is better to go with used car in India.
2. Dents and scratches
The next biggest reason to avoid a new car for me has been the worry of dents and damages. When you buy a new car, even a minor scratch or dent will hurt you quite a bit. Invariably, in Indian traffic, you can expect some level of scratches to happen all the time. The roads are congested, parking space is limited, people driving badly (especially me) and the list goes on. I did not want to drive conservatively just because I have a new car and want to avoid scratches. I notice new car owners driving their car carefully over bumps and potholes while I am just zipping past them :).
3. Insurance cost
Insurance for new cars is way more than an old car and understandably so. Repairs on a new car will be higher if something breaks or if you are in an accident. As the car ages, the insured value comes down and so does the insurance premium that you need to pay each year. By buying the car some 3-5 years later, we have left the burden of high premiums on the first owner. The cost of insurance will also become half the original premium after 5 years, just like the cost of the car.
4. Resale value
This is not really important for me, since I like to use things for a long time. So if I were to buy a new car, I would most likely not replace every 5 years. It will stay with me for a long time. So resale value is not a big deal for me. But for others it might be important. The value of the car depreciates quite quickly in the first few years. One more reason to go with used cars.
Of course not everything is rosy when buying used cars. Here are some disadvantages.
It takes a lot more effort to buy a used car because you have to search for several cars. Then shortlist a few and visit them. When you have finally decided on one or two cars you have to get a mechanic or person who know cars to check it. All this takes time and effort.
Maintenance of an old car can be expensive. Some parts of the car may have worn out and need replacement; for example suspensions or brake pads etc. There is risk of some one selling a car that has been damaged and repaired which you or the mechanic might have missed out. Selling a used car is even more of a hassle because you are trying to sell an old car to a third owner. Finally you will not be getting all the latest in tech and fuel efficiency with the older cars. You have to make do with what you’ve got.
Do you know any other reasons for or against used cars? Do let me know in the comments below.