If you’re looking for comfort and convenience without breaking the bank, a second-hand car could be the answer to all your travel problems. It will cost you less than buying a new car, and it will be easier to maintain it. A used car can also be a smart choice if you’re new to driving or don’t want your car to be damaged. If you’re not careful, you could be tempted to pay more for a used car than you need. How do you calculate the price of a used car? These are the main factors you should keep in mind.
Age of the car
It is important to remember that the car’s value decreases the moment it leaves the showroom. And it continues to decline with each passing year. The model, make, and variant of a car will all affect the rate of depreciation. The price of a car will drop if it is older than its value, and vice versa. You should also check if the model has been discontinued if it is older than 10 years. Even though the price of a second-hand car will be much lower than that of functional models, it might prove difficult to find spare parts.
Let’s examine the impact of age on second-hand car valuation.
In the table above, the term IDV refers to the current market value of the car after subtracting depreciation from its selling price. This table clearly shows how the car loses value each year.
Distance covered by the car
A car that has been driven a lot will be more expensive than one that is used only occasionally or for short distances. You must first check the odometer to determine how old cars are valued using distance parameters. A low price can be achieved if your annual mileage exceeds 10,000 to 15,000 kms, or if you have covered more than one lakh kilometers.
What insurance is available for the vehicle?
Insurance also affects the price of a second-hand vehicle. We have discussed how age and depreciation affect the IDV. However, it is important that you remember that insured cars will be more expensive than those without insurance. You can also negotiate a lower price if your car’s insurance expires and has not been renewed by its previous owner. Even if it means more hassle, purchasing an insured vehicle will be less stressful.
The number of owners
A car with multiple owners should be less expensive than one or two. This is because more owners mean more wear and tear. But, it is false to claim that multiple owners will guarantee a lower car price. In determining the price of an old car, the most important factor is still its condition.
Both internal and external conditions
You should always inspect the exterior of your car for cracks, dents or scratches. Pay attention to the tread and tires. Next, examine the interiors of the car, including the seats, steering wheel and clutch as well as brakes, engine, gear system, engine, and gears. Before you settle on a price, make sure to inspect the engine oil, gear oil, oil filter, and air filter. If you don’t have a lot of knowledge about cars, it is a good idea to hire a professional mechanic. You should take your car for a test drive. Be aware of unusual noises or vibrations and any tendency to skid, leakage, etc. The car’s condition will determine its value.
Service and accident history
When estimating the price of a second-hand car, consider its history in service and accidents. It is more likely that a car has been maintained by its previous owners or at authorized centres. Check to see if any parts have been replaced and, if so check that the replacement is authentic. An older car that has had a good service record will be more expensive than one that hasn’t been well maintained. Check to see if there have been any accidents with the car, and if so whether they were minor or major. While minor or cosmetic damage might not have a significant impact on the car’s price, major structural or mechanical damages will make it more expensive. The price of the used car might make it more expensive, and you may have to face additional problems or difficulties getting it insured at a reasonable premium. Accident-prone vehicles are more expensive and therefore attract higher premiums.
Personalised car
You don’t know how to calculate the secondhand car price if you plan to purchase a pre-owned customized car. These cars have been modified and altered to make them unique. The first owner will modify the original model by adding extra wheels, spoilers to the rear, and changing the engines. These modifications reduce the car’s mileage and increase the insurance burden. Avoid spending a lot of money on personalised cars.
Keep an eye out for other factors
The final price of a used car will depend on many factors, including the location, the colour, the documentation, and the demand for that make and model. Research online first. You can find used car price calculators on many comparison websites and dealer websites. All you need to do is enter the details like make, model, year of purchase, location, and other relevant information to calculate an estimate price. The actual price may be slightly higher because these used vehicle calculators don’t account for service and accident history. You can compare prices on different websites and look through ads online for similar cars to get an idea of what you will pay.
Documents for Cars
This is, without a doubt, one of the most important aspects in evaluating second-hand car prices. You will need to have a registration certificate and a PUC certificate. Also, a receipt for road tax payments. You may need to spend more if the paperwork is correct, but this will protect you from legal problems and penalties.
A second-hand car loan can make the process of buying a vehicle easier
These factors will help you get a great deal on a used vehicle. However, you may also be eligible for a loan to ease the process. These days, top financial institutions offer attractive interest rates on second-hand car loans so you can pay the loan amount quickly and not exceed your monthly budget. You will often find flexible terms and multiple repayment options. Compare different terms and conditions to find the one that suits you best and then take a decision.