Should I buy a new or used car?
Whether to go for a new car or a used model is the eternal question for many car buyers. Each option has its pros and cons, so which is the right choice for you?
Published: 19th September 2014
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For a long time, deciding between whether to buy a new or used car has been a purely financial decision – if you could afford it, then you went new; if you couldn’t, then you got a used car. Simple as that. The problem is, this gap is getting ever narrower, especially with the attractive finance and leasing deals available at the moment.
Of course, it's not hard to spot the most obvious difference: new cars are just that, so you can generally specify them exactly how you want, without having to take your pick from what other people have chosen. They also come with attractive things like warranties and servicing deals, so that if anything goes wrong, you’re less likely to have to fork out for the work. Brand-new cars are also less likely to go wrong as they haven’t had years of hard use.
New cars also tend to be cheaper to run, too. This is because cars are constantly getting more efficient, thus saving you money on fuel costs and - thanks to the lower CO2 emissions - reducing the amount that you have to spend on Vehicle Excise Duty. You also don’t have to fork out for an MOT until three years after it was first registered, meaning that you don’t have that agonising wait for a piece of paper telling you your car has (expensively) failed.
New cars are no longer significantly more expensive than new cars, either. The rise of leasing deals, monthly finance deals and company car schemes, means that new cars are more accessible than ever. Company cars are getting cheaper to run all the time, too, as their costs are partly based on CO2 emissions, which, as mentioned above, are reducing all the time. New cars also tend to be safer than older models, with extra safety kit becoming more and more prevalent across the market.
It’s not all good news with new cars, however, and the major problem is depreciation. A new car drops in value by, on average, about 20% as soon as it drives off the forecourt; and, if you drive around 10,000 miles a year, then over three years, it’s likely to lose around 60% of its value, and possibly much more. That’s a hefty chunk of cash to lose in such a short space of time.
There’s also the fact that, as cars get more and more complicated, they can be more expensive to fix. Granted, much of this work will be carried out under warranty, but not everything is covered; and, if your brand-spanking new car comes with only a two-year warranty, which some still do, and you’ve got a three-year leasing or company car deal, then that’s not an awful lot of help when it comes to that final year.
At the same time, the advantages of buying a used car are equally well known – you generally get more car for your money than you can new – especially with depreciation-heavy cars, such as luxury saloons or sports cars. If you don’t believe us, search for a BMW 7 series in Auto Trader’s classifieds. It’s quite astonishing what you can get.
Yes, you won’t necessarily be able to specify the car exactly how you would have chosen it; but, generally, you will be able to find a car out there that’s right for you and - crucially - with that big depreciation hit already taken for you
However, and this is a fairly significant 'However...', used cars are just that – used and, possibly, ab-used. You don’t get that box-fresh sensation that you do from a brand-spanking new car. There’s also the fact that they are more likely to go wrong, simply due to wear and tear, and are less likely to have much (if any) warranty on them, so those problems will probably have to be fixed out of your own pocket. It’s also worth considering that they’re likely to cost more to tax and to fuel thanks to older cars’ worse fuel consumption and higher CO2 emissions. You may well also have to MOT it every year – a further cost that you have to take into consideration.
So, there you have it, whether you go new or used is really down your priorities. If you can afford the initial purchase price (and depreciation), then a new car is probably the way to go – they’re generally safer, more efficient, cleaner and cheaper to run. But, if you want something a little bit more interesting and for not much money, then those used buys start to look ever more tempting. However, look out for a good used one as repair bills and running costs can be steep on used cars.
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