Advice on Buying first Car

In today’s world, a car is more of a necessity than a luxury. Whether you live in a city or a country side, a car is one of the safest and most comfortable means of travel. Buying a new car is a big decision and one has to consider every possible aspect while choosing one. 

Choosing a car can be very confusing and hectic so here’s an article that can make the process a tad bit easier.

Here are some of the few questions that first car buyers are most concerned of:

• New or 2nd hand car?

• Budgeting for a car.

• How much loan should you be taking for a car?

This article will be based on the data of some of the new car buyers in a hope of helping you make a right decision. 

• New or second hand car?

A lot of people, as close to 60-80% prefer to opt for a new car instead of a second hand one. Some may even buy a second hand car first as a practice car and upgrade it later with a new model. The preference of the new car over the older one can be because of few things including, much less maintenance, warranty offers, newest features and even the fresh appearance.

The preference of 2nd hand cars can be because of budget constraints, rough usage of objects or just as a learning experience. While a brand new car may cost around Rs. 6-7 lakh, the second hand car of the same model will cost about Rs.3-3.5 lakhs. 

Here are some of pros and cons of buying a new car:

Pros:

• Latest technology, newest features and trending design quos.

• Manufacturer’s services and Warranty can be availed for a pre-decided time.

• Less maintenance cost when everything is brand new.

• The feeling of ownership and pride of owning a newest, upgraded model.

• Better option for a long term use.

 

Cons:

• Expensive compared to a used car.

• Depreciation gets higher as the car is being sold again.

• Requires a higher budget and better finance.

• You may also miss out of higher end versions as well as better models due to budget constraints.

• If loan is taken, a chunk of money has to be set aside for monthly dues.

• Some Pros and Cons of used Cars:

Pros:

• Much cheaper compared to new cars.

• Can be bought with lower budgets or no loan.

• Lower insurance premium.

• Lower depreciation.

• Better resale value even after 2-3 years of use.

 

Cons:

• Old tech and features with older designs.

• No current updates and will have no manufacturer’s warranty.

• High maintenance cost.

• Good enough only for short-term use.

If you are planning to own the car just for 2-3 years it’s better to opt for a used car however, if you are looking to keep the car for 5-6 years or more, a new car is the better choice. Depending on ypur current budget, you can also opt for a used car and upgrade it to a new car later.

• Budgeting the car:

Most of the part of buying a car includes setting up a realistic budget. Your budget can vary on different aspects like  your earning, spending habits and repayment of monthly installments. But how much should you spend on your first car? That depends on few factors:

• Would you like to opt for a loan?

• How much EMI amount can you afford to pay if you take a loan?

• What is the purpose of the car?

• Features, tech you are specifically interested in.

Most of the people that are looking to buy a car will be spending 10 times more of the monthly income while the used car owners spend anywhere around 6-7 times the monthly income. Fir example, if your car is much more than a means of travel, and if your salary exceeds Rs. 1 lakh, then spending 9-12 times of the monthly salary. If either of these do not apply, going for a 5-7% is sufficient.

• How much loan should you be taking?

For the used car, you do not actually need to take the loan. Most of the used car owners do not take a loan. Only 25% of the used car owners have opted for loans of only half of the actual value. With the new car, most opt to take a loan with the loan value being 2/3rd of the total car value. Since a car is a depreciating asset (the value will reduce over time) it is advisable to get a 50% loan of the actual car value.

When budget is decided, make sure it does not interfere with your cash flow too much. Investing a high amount for a depreciating asset especially if you do not own a house yet is not advisable. Managing your money is a huge part of car buying so make sure you have thought it through.

Visit mynewcar.in to search, compare and select the car of your dreams. Mynewcar.in also provides you with the ‘advice’ column that is a set of articles mainly designed to answer the day to day car related 

questions of a customer. From buying advice to new car launches, latest offers and automobile news, mynewcar.in got you covered for all. Not just that, MYNEWCAR also provides you with car maintenance tips and also with car driving tips which makes caring for your car much easier.

Mynewcar.in also brings you new offers on your favorite cars every month. Now you can also sign up for new offer notifications and daily car related updates. And if you are looking for a financial option, click here to calculate the EMI of your favorite cars now.