Should I buy a new car or a used one?

What to think about when buying a new vs used car

Do you want a car fresh from the factory, customised to your exact specifications? Or do you want a well-looked after used car that might hold its value better?

Whether you opt for new or used, try to keep focused on the core reason for getting your new car.

Here are some key things to consider:

• Non-negotiables: Do you have any essentials in mind for the car? Child safety features or cheap running costs? Off-road compatibility or small enough to navigate a tight driveway?

• Driving needs: Is this a ‘run around’ car or does the car need to be ready for lots of long motorway trips?

• Storage space: Do you need lots of room for something, like a pushchair, wheelchair, sports kit or luggage?

• Running costs: How much are you willing to spend on tax, insurance, maintenance and fuel consumption?

What are the pros and cons of buying a new car?

With your key needs clear, let’s take a look at the pros and cons of new v used cars to help inform your decision.

Pros:

• Reliability – statistically, a brand-new car should be more reliable than an older car – and you won’t have to worry about replacing parts or tyres any time soon.

• Warranty – new cars always come with a warranty, usually between three and ten years

• Maintenance – if you lease a new car, it can come with a maintenance plan as part of the monthly fee, so you don’t have to think about paying for servicing and certain repairs.

• New tech – new cars come with new tech features like lane assist, automatic emergency braking and parking sensors, making them safer.

• Customisation – when you order a new car, you can pretty much tailor the spec to suit you, from body colour and interior to extra safety features.

• Fuel economy – after the first 1,000 miles, a new car is likely to be cheaper to run and more environmentally friendly, so you may pay less for fuel.

• Finance deals – you might get a good deal on a new car if a dealer needs to hit sales targets. Many dealers offer 0% finance packages, low-cost PCP (personal contract purchase) or lease deals – options not always available for used cars.

• Perfect condition – everyone loves that new car smell, no scratches or dents, immaculate inside and out…

Cons:

• Price – a new car is likely to be more expensive than a second-hand model, especially with admin fees, delivery charges and optional add-ons. (Some fees are negotiable, though, so always check if the on-the-road price includes all mandatory costs.)

• Depreciation – your new car will start losing value as soon as you drive it off the forecourt. It can depreciate by as much as 60% by the end of its third year.

• Waiting time – you might have to wait weeks or even months for some new cars, especially if you’ve a list of extra specs you want added.

• Can be more expensive to insure – the value of your vehicle is a main factor when calculating insurance premiums. A brand-new, high-spec car is more likely to attract thieves, so the cost of insurance might reflect that.

What are the pros and cons of buying a used car?

Pros:

• Price – a second hand car will likely cost a lot less than the brand-new version.

• Less depreciation – older cars tend to depreciate more gradually than a new car, so they hold their value better.

• It’s ready to go – once all the paperwork’s done, and your tax and insurance are sorted, you can drive it away.

• Wider selection – there are more models, years and styles to choose from when it comes to buying a used car, giving you more choice.

Cons:

• Vehicle history – if you’re buying from a private seller, you are trusting in what they disclose about the car. If there’s no logbook history, you should definitely walk away.

• Little or no warranty – nearly new cars may have some manufacturer warranty left. If not, a dealership may offer you its own warranty. But there’ll be no warranty if you’re buying from a private seller, so it’s up to you to thoroughly check the used car before you buy it.

• You get what you buy – there’s no opportunity for customisation, so you’ll have to settle for the colour and spec that is available.

• Condition – a used car is likely to have signs of wear and tear. Some may be minor, while others could end up as costly problems.

What about a nearly new used car?

If your heart is set on a new car but your can't quite afford it, a pre-registered, nearly-new car could be a good compromise.

Main dealers often buy new models for demonstrations or staff loans. Pre-registered cars could be significantly cheaper than the original price. If you can find one that’s only a few months old with minimal milage, you could bag yourself a bargain.

Pros:

• High spec – nearly-new cars often boast high specifications and features included in the price.

• Balance – they offer a good balance between saving on cost and enjoying the modern features of a new car.

• Get it quickly – they’re usually available immediately.

• Some warranty – depending on the age of the car, you are likely to benefit from a portion of the manufacturer’s original warranty period.

Cons:

• No customisation – you don’t get a choice of colour or spec. As with any used car, you just have to go with what’s available.

• Not the first owner – you won’t be the first registered owner, which could possibly affect the car’s residual value.

• Finance – the finance options can sometimes be less attractive than for new cars and often come with higher interest rates.

• It will have a history – even if the car is only a few months old, it’s still important to check its history, condition and prior usage before you decide to buy.

Are old cars cheaper to insure than new cars?

It all depends. Car insurance is tailored to you, your car and where you live. In general, the newer the car, the better its safety and security. That could mean a new car is cheaper to insure than a second-hand one.

On the other hand, it may cost an insurance provider more to replace a new car than an old one. And new cars can also be more attractive to thieves, which could bump up the price of your premium.

Compare car insurance with us and we’ll help you find a deal that suits you at a price you can afford.