With the pandemic testing the restrictions of the unusual and arriving at unsurpassed highs every day, it is safe to state that living with Covid is the new ordinary. That is, changing your schedules to join all the progressions the pandemic carries with itself, being careful about open places and transport, and obviously, never under any circumstance settling on close to home wellbeing and security (masks will be simply consistently present)!
Aside from personal changes, the pandemic has additionally changed the purchasing behaviors and inclinations of the vehicle buying public. With an end goal to comprehend the confusion between choosing a new car or a used car ,we did a research study trying to discern those new tendencies.
For one, the general public has, out of the fear of community spread, chosen to forego all public vehicles for the safety of their own private vehicles like vehicles and bikes. Many have likewise indicated expanded interest for purchasing vehicles this year, specifically used ones. This expansion in vehicle purchasing plan is generally because of the public wishing to give a more secure technique for transport for their family. Be that as it may, due to the Covid incited lockdown, things haven’t been simple.
The whole world has seen a monetary stoppage as an immediate aftereffect of COVID and the lockdown, and UAE also has felt the quakes of spending imperatives. Purchasing a vehicle, while it is the most secure alternative for some, doesn’t come cheap! Another vehicle implies oodles of cash, even the least expensive new vehicle in the market costs well more than 0.5 million (us dollars) . That is probably the reason for most opting to buy good used cars! A good used car will be available anywhere upwards of 0.1 million (us dollars) while 2-3 old well maintained pre-owned cars as low as 0.3 (us dollars) million, these cars easily satisfy both needs; that for physical safety and economic safety.
22.5% of car purchasers who anticipated purchasing another vehicle in 2020 are probably going to change to used vehicles, and for good measure. A higher number of individuals have been settling on used vehicles throughout the previous barely any years, and the proportion of used to new vehicle exchanges has expanded from 1.25 to 1.5 over the most recent 5 years. The yearly used vehicle exchanges presently remain at ~4.8 million when contrasted with ~3.3 million for new vehicle exchanges in FY 2019–20
If the fundamental issues around transparent pricing & assured quality are taken care of, buying a pre-owned car is generally an economically more sound decision. The devaluation bends of practically a wide range of vehicles propose altogether quicker deterioration in initial barely any years and afterwards a drop in the pace of deterioration, in less complex words a normal vehicle deteriorates ~40% of the on-road cost in initial 3 years and just ~25% of the on-road cost in subsequent 3 years.
Accordingly, it is obvious to see that used vehicles are increasing more footing with the overall population. As the heads of the used auto business, 60%+ of our vendor traffic and 100% of purchaser traffic has returned to the pre-COVID numbers. As far as the value point, the estimating sections of the trade-in vehicles are the same as it was during pre-COVID so we haven’t watched any value drop starting at now, which again approves that the used vehicles are popular as of now.
It a good time to buy a car?
Absolutely Yes, but how does one go for choosing a new car or a used car keeping the current financial uncertainty in mind.
We got you! Let’s do some basic back of the envelope math to compare the economics of buying a new car vs buying a 3-year-old pre-owned car, all of this for a period of 5 years when the car is assumed to be resold. After accounting for loan interest, resale value, cost of insurance, maintenance, mileage, other miscellaneous expenses like parking/cleaning, etc the cost/km of owning a new car for 5 years is 2.1 million vs 1.5 million- for a 3-year-old pre-owned car. Of course, there are always other personal factors (than just the basic economics) that come into play when making this decision— being a driving enthusiast, tolerance for cab hygiene, wait time, public transport, and more recently fear of infection in shared transport.
Also, the cost of ownership for a pre-owned or used car is way lesser in comparison to a new one. This mainly due to high depreciation, higher taxes, RTO & registration fee, and expensive car insurance policies.
The cost of ownership of a new hatchback for 5 years costs about a million while a pre-owned car costs 0.7 million or lesser. The price range of the cost of ownership increases in higher segment cars, especially luxury cars.
