New car purchase FAQs
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I do not know how to drive. should I first be learning to drive on a second hand car and then purchase a new car after I get better at driving?
  • This is the most popular approach across India. Let me explain how flawed this approach is. Assume you buy a second hand car for practise and end up with a few dents from accidents etc, you have to get it repaired it by yourself. No insurance cover will cover first party damages of an old car and even if they do, the owner’s share will be a sizable percentage due to depreciation. As against that, if you end up with similar dents on a new car, most of it will be covered by insurance, so you save money.
  • Now, when you try to sell this for-practise-bought-second-hand car, it will be third hand and not second hand. Owing to this, you will loose some more money as it will depreciate due to increased number of owners however well you have maintained it.
  • A brand new car will be more responsive and in better condition than the second hand that you use to “practise”. The new car will have better pick-up and a brand new clutch, etc. Owing to the same, you will have to go through the process of getting used to on the new car all over again without much takeaway from the old second hand car exercise.

To sum it up, the entire exercise of purchasing a second hand car for practise before you buy a brand new set of wheels just ends up in loss of money. If you are a first time driver, don’t be worried. Go for a brand new car that fits your budget. You may go for a second hand car due to budget constraints, etc which is an altogether different issue but let practise not be the reason.

For the price of a brand new car belonging to one segment, I am getting a second hand car belonging to the bigger next segment. What should I do?
  • Well, a brand new car comes with warranty for a period ranging from 18 months to two years. Some car companies are offering a longer warranty period as well. Extended warranty available at the time of purchase is not very expensive and cover the car for an additional 12 to 18 months. Insurance for a new car is more effective against damages caused due to accidents etc as the depreciation is not significant. All these benefits can be availed only with a brand new car. Also there is the intangible “high” that a brand new car gives you.
  • Also, when you up-shift to a higher segment car, it brings with it a higher cost of ownership in terms of spares and service cost which you need to be prepared for.

So, we recommend a brand new car unless, of course, the bigger next segment car is a requirement for what it offers in addition to the other smaller segment car that you have short-listed.

Should I buy a petrol or a diesel car?
The rule of thumb that one should follow to arrive at this decision is: Choose a diesel powered car if and only if your average daily distance is or is going to be in the range of 40-50 kms. For any mileage less than this range, a diesel car may not be viable as a diesel variant is usually Rs. 1,00,000 more expensive than its petrol counterpart. You need to drive as much so as to break even the additional expense.

Should I buy the extended-warranty at the time of new car purchase?
Yes. Warranty can save you a lot of expense incurred due to failing of the covered parts. Also, the cost of extended warranty is usually in the range of 1% of the car value of sometimes even lesser. So do not think twice. go for extended warranty.

Which is the best time of the year to purchase a car?
The best time of the year to purchase a new car is during the end of a calendar year and during the end of the financial year. You will see a lot of discounts during these times and you may land yourself a good deal even on newly launched variants or models.

Does the service network of the car manufacturer matter?
If you stay in tier one or tier two cities of the country, most car manufacturers will have a decent service network for your routine servicing needs. Most manufacturers now a days offer a road side assistance program for any help in case of an unfortunate break down anywhere in the country. If you do not stay in tier one or tier two cities, this factor is worth considering.

What are road side assistance programs? Should I subscribe for the program at the time of car purchase?
Most car manufacturers today offer a road side assistance program as an optional purchase at the time of booking a new car. Typically road side assistance programs are meant to help you in case of an unfortunate break down or accident on the road. Most assistance programs reach out throughout the country. The services that most assistance programs cover are: service at the break down location from the nearest service center, towing services to the nearest service center in case the car can not be repaired on the spot, transport or accommodation facilitation services in case you get stranded out of town at a bad hour and the car can not be repaired quickly. This is not very expensive and if available, one should go for it at the time of purchase of the car.

Should I buy a sedan or a hatch-back?
  • India is probably the only country wherein a sedan attracts a premium over the price of a hatch based on the same platform as the sedan  with comparable features (ex: Swift VXi vs Swift Dezire VXi). Thanks to this premium, at about the price of a sedan variant, one may be able to get a better featured and more loaded hatch based on the same platform with all the bells and whistles!
  • Hatches and sedans that share the platform have very little difference as far as cabin room goes. The only difference is of course larger boot. So a sedan and hatch which share the platform will house the same number of passengers with almost identical ease or comfort.
  • A hatch is smaller and hence more convenient in your daily urban commute.
  • Plus, a hatch even if based on the same platform, due the lack of boot, it is lighter and hence may provide a better power to weight ratio than the sedan which may assist in peppier driving and better mileage.
So, to sum it up, assess if you really need that extra boot. If not, go for the hatch. You save a handy sum of money, get a more economical running, all the loaded features.