Why Are Used Cars Affordable?
Used cars are affordable because they’ve been through depreciation and enough time on the roads to bring down their value considerably. While affordability is often seen synonymous with doubtful quality, any such doubts can be laid to rest by buying certified pre-owned cars from trusted vendors. Take Spinny for example. Spinny Assured cars undergo a very stringent 200-point evaluation, before being offered to prospective buyers.
Lower Depreciation Rate
This is the main reason why used cars cost less. Let us first explain what depreciation is. Depreciation rate is the loss of value of assets one owns, in this case a car. The rate of depreciation depends on a number of factors but the primary cause that brings the value of a car down is its wear and tear, or its mileage. The higher the mileage, the higher the depreciation rate. And for a new car this means an average 15-30% loss of value after just a year. Used cars, on the other hand, have already been through the high depreciation phase, which means there won’t be a significant loss of value once you try to sell it.
Lower Insurance Premiums
The Insured Declared Value (IDV) of a car is inversely proportional to its age, which means a newer car will have a higher insurance premium compared to an older one. A new car it of higher perceived value, leading to higher insurance costs. But once it starts clocking miles its perceived value starts to come down, due to a myriad of factors, which is why the insurance premium also comes down.
They Are Warranted
Similar to their newer counterparts, used cars from certified dealers such as Spinny come with limited warranties, which can give the customer a sense of security when buying a used car.
Great Quality Cars
Nowadays, there is nothing ‘used’ about a used car. This is because certified dealers take great care in making sure that used cars match the appearance, the durability and the mechanical standards of a new car, thus ensuring high customer satisfaction
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