Initial cost and depreciation
Although you can pick up a used car at a fraction of its original price, you can still get a good deal on a brand new car if you get a dealership desperate to meet its sales targets. Some dealers also offer 0% finance packages which might be worth considering.
Depreciation is probably one of the biggest arguments in favour of buying used as some brand new cars lose about 50% of their value in the first three years. Some cars will depreciate slower than others and if that’s the case with the car you’re considering, then it could make more sense to buy new. But the staggering amount of money you could stand to ‘lose’ after just a few years is hard to ignore.
And the insurance?
Which works out cheaper, new car insurance or used car insurance – it’s not a battle with a clear winner. It’s true that part of your insurance premium will be based on your car and (generally) the newer the car, the better its security and safety which may attract a lower premium. Equally if the car that’s being insured costs more than an older car it will cost an insurer more to replace in the event of a claim. You might also be able to get a new car replacement as part of your policy.
If you’re the first registered owner of a vehicle and it’s written off in the first year, your insurer might provide cover that gives you a like-for-like replacement instead of market value at the point of claim. But with all of that, you’ll need to add your own insurance history to the mix and if it’s not so great, any benefits from choosing a low risk car could be wiped out.
So what’s the best thing to do, yep you’ve guessed it, start comparing the market to find the right policy for you. We’ll do all the leg work and find a policy to suit your needs – just see how much you could save!