Purchasing a car involves a lot of contemplation and it remains a big decision as it is considered to make up for the most expensive investment. Adding to the complexity of selecting a car, nowadays, people desire to own a luxury car. Driven by superior performance, quality, comfort and advanced features, purchasing a luxury car is considered a matter of pride that gives the upgrade in social status.
Read more: Mercedes-AMG GT6 Concept Car Displayed At Nita Mukesh Ambani Cultural Centre In Mumbai
Taking into account that most consumers these days want to experience extravagance while not going overboard on the spending, pre-owned luxury cars have been gaining a lot of prominence in recent years. But looking at the uncertainty looming around the pre-owned luxury car segment, customers often need help to decide between a pre-owned and a new luxury car.
Delving into the customers’ confusion, the article analyses the smart investment options between pre-owned and luxury car options.
Depreciation of cars
It is quite interesting to know that there is a huge difference in the depreciation rate of new and pre-owned cars. When a new car leaves the showroom, it loses approximately 10-30 per cent of its purchase value. In addition, luxury cars lose more than 40 per cent within the first year of purchase.
Following the first year, the depreciation rate slows significantly, translating into lower depreciation rates for pre-owned luxury cars. Looking at the stark gap in the reduction of both cars, pre-owned cars make for the best option to avoid rapid depreciation of the cars.
Better value for money
Over the years, there has been a remarkable decline in the ownership period of the cars. As people continuously look to upgrade themselves with the new cars being launched in the market exhibiting fascinating features, choosing a pre-owned luxury car over a new luxury car offers a better value for money.
Gauging the urge of owners to change the car over four years on average, pre-owned luxury cars purchased from certified dealers can be considered a good bargain as they provide cutting-edge technologies well coupled with advanced safety features which are at par with that of a new car.
Moreover, as mentioned above, the depreciation rate of a new car slows down after the first year, and customers can get a good resale value on further selling a pre-owned car.
Lower insurance cost
Compared to a new car, the insurance cost for pre-owned cars is much lower than that of a new vehicle. This is major because the premium amount significantly reduces with the car’s age. Apart from this, the premium is also determined, taking into account the car’s depreciation at the time of buying or selling the vehicle. All the factors together result in a reduction in the insurance cost of the pre-owned luxury car.
Where pre-owned luxury cars are rising to the prominence of smart investment options, the increasing penetration of organised players further fortifies the offering in the segment. Looking at the industry’s dynamism, they play a pivotal role in striking the right deal for the vehicle, focusing on providing customers with value for money.
Providing 360-degree services, they offer a wide range of car models under a single roof, where they go the extra mile to ensure the vehicles are in good condition. Conducting thorough inspections and carrying out rigorous maintenance and service, the pre-owned cars they offer are as good as new cars.
Furthermore, taking care of complete paperwork during the transfer of ownership and providing a long service history contributes to saving a lot of effort and expenses for the customers, making it a wise investment for them.
This article is authored by Sumit Garg, Co-Founder & MD of Luxury Ride. All views are personal.