Should I buy a new or used car?
The prospect of buying a new car, be it a used or brand new model, can be exciting for experienced and first time buyers alike. There’s the satisfaction of getting to browse all the models on offer until you find your favourite, and then leaving the dealership knowing that the car is yours.
But when it comes to buying a car, there’s always one dilemma you’ll need to think about. Should you buy a brand-new or used car?
To help you decide whether buying a brand-new or a used car is right for your circumstances, we’ve broken down the pros and cons associated with each type of purchase, as well as highlighting a third option that has become increasingly popular with both new and seasoned buyers in recent years.
New vs used car: the pros and cons of buying a new car
Without a doubt, the single major advantage associated with choosing to buy a new car vs a used car is the protection provided by a full manufacturer warranty. You’ll get full use and cover out of this warranty, protecting you from any unforeseen problems.
On top of this, when you buy a new car, you get to choose the exact specifications it comes with (manual or automatic, fuel economy, safety, etc). There’s also no unknown history relating to the car; it’s clean and in perfect working order.
With a brand-new car that’s rolled straight off the production line, you get access to the latest and most advanced car technology, particularly when it comes to fuel efficiency, safety technology, and environmental protection. New cars also often have low emissions, which can help reduce your vehicle tax.
Of course, one big thing to be aware of when choosing to either buy a new or used car is that new cars depreciate heavily in value the moment they leave the dealership. This is often a drop of 20% of its total value, and after 3 years, the car will likely only be worth half of what you paid for it.
If you intend to sell your car at a later date, in many cases you’re not likely to make your money back.
New vs used car: the pros and cons of buying a used car
In comparison to new cars, the sale of used cars is far more common. In fact, used cars are often sold at a ratio of 3:1 when compared with the sales of new cars.
There are a few reasons for this, but the primary factor is the obvious advantage that used cars can be much cheaper than new cars. Due to the depreciation of value on new cars, when they’re re-sold as used cars, the price is reduced.
Thanks to this, when browsing used cars, you’ll find a staggering volume of affordable options that fall within your budget, meaning you can take your time to find the exact vehicle you want. And warranties are often still valid with used cars thanks to longer factory warranty policies. You can also often arrange extended warranties on used vehicles through the dealership. One thing to consider when buying a used car is that you may have to account for more mechanical issues than if you picked out a brand-new model. However, reassuringly, you’ll often find that the cost of repairs is counteracted by lower monthly finance repayments.
New vs used car: buying a nearly-new car
If you’re still debating whether or not to buy a new or used car, there is one more option available to you that could be the right fit: buying a nearly-new car.
A nearly-new car is a car that has either been used as a demonstration vehicle or leased under ownership from the dealer. Many of these cars will have been bought by the dealer to meet sales targets but not actually sold.
One major advantage of a nearly-new car is that they’re slightly cheaper than a new car, but you won’t take the full depreciation hit when you leave the dealership as it’s already happened.
Essentially, with a nearly-new car, you get all the benefits of a new car - but the selection is a little limited. You also will have an extra name on the registration company, that of the dealership. Nearly-new cars are ideal for those with a larger budget who want to retain as much value in their car as possible.
Buying a new car vs a used car
When it comes to buying a new car vs a used car, you generally have two purchase options. Buying outright or considering an affordable car finance solutions that spreads the cost over an agreed period of time.
Here at Zuto, our expert team can help guide you through the various types of car finance options available, including PCP and HP car finance, so you find the one that best suits your financial situation. We also have a help and advice section, and there are plenty more articles like this one on the Zuto blog.
Mike has worked at Zuto since 2018 and uses his experience within the industry to help customers understand the ins and outs of car finance.