240, Royapettah High Road,
Chennai - 600 014
Phone: 044-28133333

E-Mail: info@tsmcars.com
Anna Nagar
E15, Anna Nagar East,
Phone: 044-26260882
Fax: 044-26260610

Infoline. 2813 3333
#20, Car Track Road,
Chennai - 600042
Mobile: 98412 85585
98415 74842
#20, Car Track Road,
Chennai - 600042
Mobile: 98412 85585
98415 74842

Buying a New Car Vs Used Car – Factors to consider

How to make the choice between buying a new car vs used car

Are you looking to buy a car? You might be wanting to replace your existing car or it might be your first ever car purchase. In either case, the first question to ask is whether to buy a brand new car or opt for a used car. There are compelling reasons for making either of the choices and it ultimately comes down to what suits you best. So, what are the factors you should consider before making this choice? Here is a guide:


Buying a car is a major financial decision for many of us. So the first and most important factor to consider would be the financial angle of buying the car.

Cost of the car

If your budget is under Rs 5 lakhs, the only new car you can afford is a compact hatchback. But you could afford a sedan or even an MPV if you go for the second-hand option. Affordability is the biggest draw for used cars. If your budget is higher, then your choices open up a bit more and its time to consider the other factors.


A new car depreciates the minute you drive it off the dealer’s showroom by as much as 20%. Depreciation also takes off almost 50% of the car’s value in the first three years. So if you buy a new car and sell it after 3 years, you might only get half the price you paid for it.

The rate of decline of the car’s value decreases with age. So if you buy a 3 year old car at half the original price and sell it in another 3 years, the depreciation that you will absorb will only be 10-15%.

If you are value conscious, then used car should be your choice. Business owners who buy a car could possibly include depreciation of the car as an expense in their business accounts and reduce their tax liability. This makes new cars more attractive for such car buyers.

Financing the car

Most car buyers opt for some form of loan for financing the purchase. Financing for new cars is more readily available than for used cars and the interest rate offered is also lower for new cars. Dealerships also offer incentives on new cars like cash-backs and rebates which is generally not available for used cars. On the flip side, when you opt for a new car, which is more expensive than a used car, you end up paying more interest on the loan and the overall cost is much higher than the actual price.


Apart from the cost factor, the most important aspect that differentiates used cars from new cars is the durability/mileage/reliability factor. New cars come with manufacturer’s warranty for at least a year and extended warranties can also be bought at the dealership. Used cars, generally, do not have this safety net. Breakdowns and repairs, if frequent, could cost you quite a penny in value and comfort. But the days of frequent breakdowns are not common anymore. Most cars come with long-term reliability as a guarantee. Japanese cars are known for their long working life and even cars with 50,000 kms on the odometer are considered as good as new. Used car dealers are also offering Certified Pre-Owned Cars after subjecting the cars to thorough inspection and maintenance.

Purpose of Usage

What is the specific purpose of the car for you? Are you planning to drive it to work everyday? Will it be a second car for the home? Is it going to be used primarily for inter-city commute? These are pertinent questions to ask before you decide on the car purchase. If long drives are going to be routine, then you have to safeguard against sudden breakdowns and this might be a reason to consider buying a new car. But if your primary purpose will be inner city driving (less than 50 kms a day), then a used car will be an economical choice.

Period of Usage

How long are you planning to hold the car? Younger car owners generally tend to recycle their cars more for various reasons – availability of finance as they climb the social ladder of success, desire to drive the latest and the need for speed. Car owners past their middle ages tend to keep a car for a longer time. If your intention is to exchange the car within 3-4 years, then  used car will be the best bet for you as you avoid taking a big hit on depreciation ever time you buy/sell. If you intend to hold the car for a longer period, then a new car will be better since durability factor works in favour of new cars.

Who will be Driving?

Buying a brand new SUV and having it driven by a chauffeur is not money well spent, don’t you think? The thrill of driving the latest is something that one can reserve for oneself. Hired drivers may not be too careful with your prized jewel and any dent or scratch will be cause for heartburn for you. So, if you are not planning on self-driving, then used cars will be the wise choice. Having a driver also makes trips to the service stations easier in the event of repairs.


At TSM, we keep in mind all these factors and try to take away all the pains of buying a used car. We offer Certified Used Cars, verify prior ownership and even offer warranties for up to 20,000 kms. We also arrange easy financing and insurance taking care of all the documentation ourselves. When you have a dealer as trusted and as efficient as TSM, used cars are as good as new.







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