I am confused between opting for a used car and a new car. This will be my second car purchase and the first was a used car which has been with me for the past two years.
Jai, you need to make a decision based on your previous experience. If you are someone who does not care too much about current car trends and feel will get more value for money by investing in a second-hand car, then go for it.
However, a second-hand car comes with its risks. Though you may acquire it for a far lower price, maintenance, repair and renovation costs may cost you dear.
I have two credit cards with heavy debts and I need to renovate my house. I can take a personal loan to solve the problems. I have some gold in the bank and some cash I had saved for a vacation. How should I go about repaying my debts?
You can take loan against your gold rather than giving it up. This would be a secure loan and, hence, will come with a lower interest rate compared with a personal loan. You could also use some of the money you have saved for your vacation and refill the coffers later by setting aside some money for this on a monthly basis. To start with, you should try and close your credit cards—close the one with the higher debt first. There are specific home loans for renovating a house.
List the advantages and disadvantages of buying a used car.
A second-hand car is a wise investment if you chose it with care. A car is expected to be at its peak performance in the first four to five years of its use. If the owner has not used it extensively and maintained it well, it’s a good bet. You need to ensure the car has not changed hands several times.
The disadvantage is the repairs and other surprises you may encounter later. Generally, smaller cars have a better resale value and are more in demand as their maintenance costs are lower. Bigger cars and brands have lower resale value, but come with the risk of higher maintenance cost, lesser mileage and the danger of expensive repairs, as the spares will cost more.
Adhil Shetty is the CEO and co-founder of BankBazaar.com
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