Why buy used cars?

The country's economy has increased multi-fold during the recent years, thereby amplifying the number of car buyers due to the greater earning capacity resulting in the improved purchasing potential of the Indians.

But of late, the nation has come under the clutches of the distressing giants like inflation, high lending rates, volatile fuel prices, causing the masses to have second-thoughts on purchasing new cars.

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The Indian car market has been automatically hit due to the currently prevalent grim conditions registering the slowdown in the car market by 15 per cent, the lowest in the past 30 months.

The used car business is widespread in India, but has now grown in leaps and bounds to bring down the costs of the cars and to make it much easily available to the commoners in India; many auto companies have introduced the concept of used cars in India to combat the factors pulling back the car sales.

This notion opens a wide range of options to the consumers making the high-end brands, including the luxury brands available to the Indians, which is otherwise restricted to the elite and cream of the society.

Maruti Suzuki India is not only the leader in new car sales in India but is also frontrunner is used-car business.

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Growth in the Used Car Business

We all are well aware that not all the cars that ply on the Indian roads are new cars.

Some of them are bought from the used car showrooms as well.

Though this concept is not completely novel in India, the used car business has seen a remarkable growth in the past year 2010 registering a growth of 30 per cent roughly.

There are controversies regarding fluctuations in the prices of the used cars which are affected and go down significantly as and when an upgraded version of the existing car launch occurs or a brand new car is introduced, however, there is another theory disproving the above conception that whenever, a current model price is increased, the used car model price also goes up.

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The factor that hits the used car business negatively is the customers' lack of trust in the used car industry.

While in the other countries, the ratio of the used car to the new car sales is 3:1, India maintains the proportion by 1:1 due to dearth in reliability in the used cars.

The auto brands that offer the used cars in the business are Maruti Suzuki TrueValue, Tata Motors Assured, Chevrolet OK Volkswagen, Honda Auto Terrace, Hyundai Advantage, Mahindra and Mahindra's First choice, Toyota U Trust, Ford Assured and Carnation.

While we are talking about the showrooms which offer the used cars, there are a few auto portals too that offer the used cars online.

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Advantages of used car

There are many advantages, when it comes to become a proud owner of a used car as the wear and tear of a used car is lower against its newer sibling.

A carefully handpicked used car is always a good deal most of the times.

The best part that attracts the customers to go for a used car is the one year warranty that is provided similar to a new car purchase, when bought from a branded used car dealers.

The money on the insurance premium can also be saved as the value of the used car is already depreciated by then.

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Disadvantages of a used car

For the same budget fixed by the prospective buyer, a bigger, high-end model loaded with extra features can be considered, when one could only afford a smaller car with low brand value when opted for a new car.

The absence of trust in customers regarding the used cars is due to the fact that a seller usually tries to diminish the negative aspects of a used car while selling.

The seller is not usually outright in bringing out the faults in the car in order to wring out a better deal.

This is not the usual practice in the international used car business.

The buyer of the used car should be alert while dealing with such sellers and always request for a test drive and double check the documents to ensure honesty, and this is where a reliable agent chips in for assistance.

However, the buyer does not get the warranty if dealt by an agent or personal acquaintances.

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How to go about a used car

It has been recently found through a survey conducted by the search engine Google that Indians use the web by 65 per cent, surpassing the UK and US before purchasing the car, which holds true for the used car dealings as well.

Nevertheless, a certain amount of personal risk is involved, in case one opts to purchase used cars through auto portals or through search engines.

However, it is always advised to buy a used car through a well-known agent for reliability and good condition.

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Finding a good used car is always a challenge, and need to follow certain guidelines before getting in search of a used car.

The basic nutshell to buy a used car involves identifying the budget, then asking the agent involved about the car under question, with right queries, including the past condition, right documents, car history, to rule out the possibility of being a stolen property.

People mostly go for a car that is one year old to ensure the condition of the car, sometimes if the car has not travelled much, people might opt for a two year old car as well, or at the most three year old, if the car is well maintained in every aspect.

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However, a car that is more than five years old comes much cheaper than one might anticipate.

It is a perception that an average life of a car cannot be more than 10 years and the depreciation is thought to have started by 25 per cent to begin with post the average life.

Observing the auto market trend in India, even the luxury brands like the Mercedes-Benz, Volkswagen and BMW have dived into the used car business to entice the middle-income group with their extravagant brand names, which can be bought from their certified used car dealers.