While new cars often incorporate advanced technologies to minimise emissions, the manufacturing process and the extraction and processing of materials contribute to a significant carbon footprint
The automotive industry is gearing up for a dynamic 2024 as 60 new vehicle models, from entry-level to high-end, are set for introduction. The industry faces trouble, including rising costs, but is determined to build on the impressive sales figures of the previous year. By December 2023, over 3 million new cars were already sold throughout the country.
Such a large selection of models shows that OEMs are willing to cater to every segment as well as the ever-evolving tastes of consumers. We also see that this is a marketplace where every OEM is working hard to claim interest and liking from potential buyers for every price band variation. However, there is a question: "What happens to the used vehicles that were once owned by these buyers?"
In India, a car is frequently the second most substantial expenditure for individuals, following the purchase of a house. This requires significant financial planning and commitment to make the dream of owning a car true for the majority of the population.
Now the next question is: Is purchasing a new car a wise investment?
Buying used cars is slowly gaining ground within Indian society. If selected well, used cars can be as good as new ones in quality and performance. This entails extensive research into pricing, make, model, safety features, maintenance costs, and, of course, fuel efficiency—whether for petrol, diesel, CNG, or even a fully charged EV.
A. Financial Benefits
Lower Upfront costs
Used cars are much cheaper than new cars. There are several reasons for this pricing disparity, such as the first depreciation impact, people upgrading their cars or corporations changing their fleets, OEMs introducing new variants to stimulate market demand, and the lack of additional costs that are frequently related to buying a new automobile.
Lower Insurance Premium
A vehicle’s age greatly impacts insurance costs because older cars are typically valued lower and therefore cost less to insure. Thus, purchasing a used car can lead to cheaper insurance costs, saving a lot of money.
Depreciation Advantage
During their first several years of ownership, new cars rapidly lose value. Buying a secondhand automobile spares the buyer from the sharp initial depreciation seen by new autos. By purchasing a used vehicle, the buyer will experience less financial strain and use the car in good condition for years to come.
B. Certification and Track Record Maintenance of Used Vehicles
The advantage of the CPO (Certified Pre-Owned) Programme
In India, authorised dealerships and major manufacturers offer certified pre-owned (CPO) programmes. Before the used car is certified, it must pass an inspection and reconditioning procedure as part of these programmes.
This process usually involves a thorough multi-point examination covering things like engine performance, body integrity, and interior quality. Additionally, CPO programmes may sometimes include warranties and opportunities for extended warranties, giving used car customers additional security and comfort.
Access to vehicle history report
The availability of vehicle history reports has made it easier for purchasers to make informed selections regarding used cars. These reports include vital details about a vehicle's history, including past ownership, accident history, service records, and odometer readings, which enable purchasers to make an informed decision regarding the car's general condition.
C. Environmental Benefits
Reduced Carbon Emissions
While new cars often incorporate advanced technologies to minimise emissions, it's crucial to consider the entire life cycle. The manufacturing process and the extraction and processing of materials for new cars contribute to a significant carbon footprint. On the other hand, as cars age, their ongoing operational energy requirements remain relatively stable.
Although fuel efficiency may decrease slightly as cars age, the overall energy demand tends to be lower as compared to the energy-intensive phases of manufacturing and initial use. Therefore, driving an older car can contribute to the reduction in emissions associated with the production of new vehicles.
Preservation of Resources
The production of new automobiles uses up precious resources, including metal, plastic, and energy. Choosing a secondhand car helps preserve these resources since it eliminates the need for energy-intensive production methods and new materials.
Lower Manufacturing Impact
The production of new automobiles uses a lot of resources and produces a significant quantity of greenhouse gas emissions. Energy is used and pollutants are released during the manufacturing of a new car, from the extraction of raw materials to part assembly. Choosing a used car lessens the demand for the manufacture of new cars, which lessens the impact on the environment.
Conclusion
The value of used vehicles goes beyond personal preferences, playing a crucial role in being both financially smart and environmentally friendly. When we reuse used cars, it helps cut down on pollution by reducing the need for new materials and making the production process more energy-efficient.
This thoughtful approach also promotes fairness and inclusivity in sustainable transportation efforts. To make this positive change happen, it's important to have smart policies that encourage and support the use of used cars.
Working together globally is key to creating common standards and addressing challenges in the international trade of used vehicles. This balanced approach ensures we are being environmentally responsible without making things overly complicated, making sustainable choices not just available but also impactful.
(Vivek Datta is MD and CEO of Globe Toyota.)