When it’s time to invest in a new vehicle, it can be tricky to know where to start. One of the main decisions you’ll need to make is whether to buy a used or new model – but with so many to choose from, it may feel a little mind boggling. Here, we take a look at why buying a used car may be better than buying one that’s brand new.
Depreciation is the difference between the value of a vehicle when you purchase and when you sell it later down the line. The rate at which a car depreciates will depend on the make and model, as some hold their value more than others. According to Money Advice Service, the drop in value is “typically between 15-25% in the first year and up to 50% or more over three years”. Unfortunately, the value of a brand-new car may drop as soon as you drive it off the forecourt – so it’s important to consider this before you purchase. You may find it makes more sense financially to get a “nearly new” car as it is likely to depreciate at a much slower rate.
New cars are usually much more expensive than used ones. Buyers are paying a higher price tag because they have the privilege of driving and owning a car that no-one has before. This means that there is no vehicle history to examine or worry about pre-purchase – so there’s less likely to be any nasty surprises later down the line. Plus, new cars come with the full warranty package, giving buyers the peace of mind that the vehicle is covered should anything unexpected happen.
While this buyer security is positive, it comes at a price tag. Many used cars will still be covered by warranty and buyers can do thorough history checks before they buy – so choosing a used car may save you heaps of cash. If you’re figuring out the best way to buy, you could look into financing your car instead of buying outright with companies like Go Car Credit – so you can spread the cost across monthly repayments.
Buying a new car usually means that the dealership will need to order your vehicle from the factory. This can often mean lengthy wait times – weeks or even months in some cases – particularly if the factory is overseas. Plus, if you are ordering a customised vehicle with a specific trim or added extras, it will take them time to fit these at the factory. So, if you need a new car as soon as possible this may not be a viable option for you.
When it comes down to it, whether a new or used vehicle is right for you depends on a variety of factors. How quickly you need the car, how big your budget is and whether you need to worry about losing money due to depreciation. Once you have answers to those key questions, you’ll know which is the best option.