New vs used: reasons to choose a used car

Not sure whether to choose a new or used car? Going used secures you many benefits aside from simply much lower cash and finance costs

Matt Rigby
Aug 19, 2019

Ever been put off the prospect of buying a used car? Worried about a dodgy history or a lack of warranty? Choose wisely and there's no reason to put up with those compromises with a used car. Here are a six excellent reasons why you should put your fears to bed and save yourself thousands with a well looked after used car deal over a brand new model.

While the idea of a brand new car – factory fresh and built to your own specification – is a big pull, the expense and long wait required can make putting a brand new car on the drive impossible for many drivers. In fact, used car purchases are far more common, with around four times as many transactions taking place every year than new car sales.

Don't forget, the used car market isn't just restricted to cash buyers, you can get very competitive PCP finance and hire purchase deals on used cars as well. With far lower cash prices and relatively low APR charges for many used car finance deals, whether you're paying cash or with finance, going used should leave you with more money in your pocket every month.

Keep reading for just a few of the reasons why you might want to take the used car route for your next purchase.

 

The price is far lower

It seems an obvious thing to say, but used cars are cheaper to buy than brand new ones. Of course, second-hand cars will have some wear and tear, depending on things like their age and mileage, but this will be reflected in the price you pay. And if you choose a popular car, then there will be plenty of examples to choose from.

Not only does this mean you shouldn't have much trouble finding one with the colour, trim and engine you want, but you’ll also be able to be more choosy about condition. The term 'used' does not only refer to 20-year-old rust buckets with 300,000 miles on the clock, so spending a little time tracking down the right used car could save you thousands compared with a new car, while still seeing you in a modern, good condition vehicle.

Oh, and the more cars to choose from, the cheaper the price is likely to be… win-win, right?

It’s a great way to minimise depreciation

Brand new cars typically lose thousands of pounds in value as soon as you drive off the forecourt, with many cars losing up to 20% of their value in the first 12 months. This means that if you buy a car that's already passed this stage, the first owner has taken the financial hit. 

As a result, choosing a car that’s one or two years old means you can get a fresh, well looked after car, all for a far lower cost than it would have been new. This is a particularly strong argument for buying nearly-new cars; in many cases you are buying what essentially looks and feels like a new car, but the cost you pay if far lower - however you choose to pay for it.

Used car PCP deals are far more affordable, too, as the lower initial price means that your monthly payments are correspondingly lower, as the difference between the car's initial value and what's it worth at the end of the contract is considerably smaller. Opt for hire purchase - where you own the car once you've made all of the monthly payments - and it's a similar story.

You can get a fancier model for your budget

Thanks to depreciation reducing the value of new cars as they age, going for a used car can help you go from an unexciting mainstream car to a more upmarket model. If you're shopping for a brand-new car, a budget of £18,500 will only stretch to a basic, entry-level Ford Focus, but turn to the used market and you'll find it'll get you a larger 18-month-old BMW 3 Series with more power and extra equipment for your money.

You dont have to wait for the car to be built

When purchasing a new car, you might be put in a ‘build queue’ or waiting list. For a number of popular models, this can run into months or even years, meaning that if you want to take advantage of buying a new car to choose a specific colour or set of options, you're likely to have to wait. Go for a nearly-new ex-demonstrator or pre-registered car, however, and you can get a car that's barely covered any miles, yet is far cheaper and ready to be delivered.

In a few cases, really exciting new cars – sports cars like special editions of the Porsche 911 – can be sold out or have a really long waiting list. Going used, however, allows you to see exactly what you're getting and know exactly when it'll arrive. You may still have to pay a high price with very popular used cars, but it's only in a few rare cases when a second-hand car will cost more than a new one.

Long warranties still mean peace of mind

While some manufacturers still limit their warranties to three years or 60,000 miles - whichever comes first - many now have much longer policies. Toyota and Hyundai, for example, offer five years, while Kia offers seven years and 100,000 miles.

SsangYong’s warranties last for a whopping 150,000 miles and seven years. Some MGs are also available with a seven-year warranty, too, but only for 80,000 miles.

The good thing about these longer warranties is that they follow the car around. So even though a car might change hands, the warranty remains valid in its entirety, meaning you could pick up a two-year old Kia for a fraction of its original price and still be protected by a five-year warranty.

You could save money on car tax

Brand new cars feature a first-year tax rate based upon their CO2 emissions and, although this is generally bound into the on-the-road purchase price of a new car, it is a significant extra cost. Furthermore, most petrol or diesel new cars will cost £145 per year to tax after this point. That's more than any model registered between 2001 and 2017 that emits 130g per km of CO2 or less.

This tax benefit to buying used cars registered before April 2017 means that low-emission models could save you up to £145 per year. A handful of low-emission cars that cost more than £40,000 new could even save you up to £465 per year compared with new equivalents. Examples of pre-April 2017 cars that emit less than 100g/km of CO2 - which are free to tax - include everything from many petrol city cars to the Audi Q7 diesel plug-in electric hybrid SUV, a number of diesel BMW 3 Series models and petrol and diesel VW Golf versions.

 

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