Kathmandu, August 9:

Buying a new car may not be a difficult task, but when it comes to purchasing a used vehicle, one has to have better knowledge and should be capable of finding the right balance between value and risk.

With rising purchasing capacity and changing lifestyle, many two-wheel riders

are gradually upgrading to four wheels. Most of such auto lovers initially go for used or second hand vehicles, which not only suit their pockets but also meet their needs and maintain the status symbol.

Lately, recondition houses dealing with sales and purchase of second hand vehicles have mushroomed in Kathmandu valley. There are over one and half dozen such recondition houses in the Valley dealing with only four wheelers. The figure could double if such recondition houses, which deal in two wheelers, are added to this.

Used vehicles are often the best value. This is especially so for late-model ones. Not only is the price lower than a comparable new car, but ownership expenses such as insurance and taxes are lower, and a used vehicle has already taken its biggest hit in terms of depreciation.

In addition, buying used vehicles is often a way to get a better-equipped vehicle than what you would be able to afford if it is new.

But buying a used vehicle is an exercise in finding the right balance between value and risk.

Here we present some useful tips and issues to be considered before purchasing a used car:

Reliability

One thing that has made used cars more appealing is their improved reliability. In a survey carried out by Consumer Reports in the US from 1980 through 2000, it has been found that reliability of vehicles has vastly improved. Reported problems declined to a fraction of what they were in 1980. Rust and exhaust-system problems, once common, are now no longer a major concern. As a result, buying a late-model used vehicle is not as much of a risk as it used to be.

When properly maintained, today’s vehicles should easily go well past 100,000 miles, and many could reach 200,000 miles without a major breakdown.

Warranties and repairs

Although used cars are more reliable, maintenance and repair costs are important considerations. In the first two or three years of a car’s life, it has fewer problems and is typically covered by a comprehensive warranty. A used car, on the other hand, is either close to coming off warranty or already off it.

This means that owners will have to pay for repairs, but most costs will probably go to replace parts like

tires, brakes, or a battery-high-wear items that often are not covered by a warranty anyway. The expense of replacing all of them, if necessary, would still be relatively modest considering the overall savings from buying a used vehicle.

There is always the risk that you will buy a lemon. Even a car with a great reliability history can be a risky proposition if it was abused by the previous owner or if previous damage has been hidden. By giving the car a careful inspection yourself and having the vehicle

thoroughly inspected by a qualified mechanic, you can usually get a good idea of the car’s value.

Depreciation

A major disadvantage in buying a new car is the rapid depreciation it undergoes in the first few years. Models typically lose about 45 per cent of their value in the first three years, compared with 25 per cent over the next three. But this varies greatly among models.

Several factors determine depreciation, including the model’s popularity, perceived quality, supply, and whether or not the vehicle is of the current design. The average depreciation on a $27,500 vehicle leaves little more than $15,000 after three years, a huge hit in residual value.

Insurance

You will typically pay less to insure a used vehicle than a new version of the same vehicle.

Safety

Buying a used car means you won’t have the latest safety features. Newer features such as electronic stability control (ESC), head-protecting curtain air bags, LATCH child-seat restraints, and frontal air bag systems are harder to find on older vehicles. But a vehicle with more common safety features such as antilock brakes, traction control, and side air bags will be more affordable on a used car than on a similarly equipped new car.

If you can accept a reliable vehicle that is in less-than-mint condition and you are willing to pay for maintenance and repair costs, your dollars will go further when buying a used car rather than a new one.