New or used car - which one to buy?

Unsure whether your next car should be second-hand? We'll help you decide on a new or used car

John Evans
Mar 13, 2019

It's easy to see the attraction of a shiny brand new car, built to your specification, with low monthly finance payments thanks to tempting manufacturer offers.

But the advantages of buying new are being chipped away by increasingly competitive offers for used cars, which are increasingly reliable and available with low-rate, flexible finance. You've also got an enormous amount of choice, from nearly-new models with low mileage and significant discounts on the new price, to older cars that can be bought for less than £100 per month.

Both new and used cars benefit from extensive checks and guarantees to give you the confidence to by online without having seen them first. Read on for more advice on whether a new or used car is best for you.


New or used car: key differences

Click on any line to jump to a more detailed description or scroll down to view all the pros and cons of buying a new or used car.


Buying a used car: the advantages 

Less expensive than a similar new car

Every brand new vehicle is sold at a premium - partly because people will pay more for a shiny new car. But that factor evaporates as soon as the car is delivered, and its value decreases.

So there are big savings on nearly new cars, which may be less than a year old. Pre-registered models can be good value too: dealers have registered these cars and put themselves as the first owner in order to hit sales targets. They are usually sold on with generous discounts, even though they may only have ten miles on the clock.

After three years, many vehicles are less than half the price that they were new, which can mean that they are tens of thousands of pounds cheaper.


Buy a better used car for the same budget as a new one

Your money goes further when you buy used. You can pocket the difference or upgrade your expectations, with a better car for the same budget.

Instead of a new entry-level Ford Fiesta, which costs from more than £15,500, you could have a 2018 BMW 1 Series, 2017 Mazda MX-5 or a 2015 Audi Q3 for a similar price.


Approved used schemes provide reassurance

Buy an approved used car and you can be reassured that there are no skeletons underneath the bonnet. Every car has a thorough mechanical inspection and history check to ensure that it meets strict standards and that there is no finance outstanding, serious crash damage and that the mileage can be guaranteed. A warranty is also included. Not all cars meet the approved


Reduce your car tax bill

Buy a new vehicle and car tax will be charged under the current set of rules. Unless you have a fully electric vehicle, this will cost you at least £140 annually, from the second year of ownership. Cars costing more than £40,000 from new also face a £310 annual surcharge until their seventh year.

But if you choose a car that was first on the road before April 2017, you could pay a lot less, as long as it's rated as a low-emissions model, emitting less than 121g/km of carbon dioxide (CO2). The maximum rate of tax you'll pay for one of these models is £30 a year.

Much older cars that were first registered before March 2001 face a different, and considerably higher, rate of tax.


Flexible finance available at low rates

Finance options for used cars have been transformed in the past decade, and used buyers now have the same flexible offers available to new car customers, at low rates of interest.

The most popular form of finance is Personal Contract Purchase (PCP). Monthly payments are kept low because they only cover part of the cars cost. Together with any deposit (which is often optional), your repayments add up to the value that the car is expected to lose during the agreement.

This means that you can simply return the car at the end of the agreement and walk away. Alternatively, you can pay the remainder of the cost - which should be close to the car's value at that time - to own the vehicle.

If the car ends up being worth more than expected, then you can trade it in and use the difference towards another vehicle - or ask for the money to be returned to you.

Virtually every used car is available with Hire Purchase (HP) finance, which divides the cost of the car into equal monthly instalments. Once you have made the final payment the vehicle is yours.


Warranty still valid on used cars up to seven years old

Most new cars have a three-year warranty which stays with the car when it’s sold. So, buy a one-year-old car, and you have two years’ cover remaining. But some manufacturers are now more generous. Lexus, as well as, er, Ferrari and Lamborghini, offers a four-year warranty. Toyota, Subaru and Hyundai provide five years-worth of cover, as does Alfa Romeo on its Giulia, Stelvio and Giulietta models. Kias come with a seven-year warranty. Even if you buy a three-year-old car, you'll have four years cover left.


Immediate used car delivery

Waiting times for the most popular new cars can stretch for months, making the process infuriatingly long. You don't have that problem with used models, including pre-registered cars, which offer many of the benefits of a new car without the wait.


Buying a new car: the advantages

Built to your specification

Whether you want an economical model that looks like a racing car, or a panoramic sunroof that lets you switch off the air conditioning, buying a new car that's built to your specification means that you're in control - as long as you can afford the extra options.


Personalisation options

Buying a new car doesn't just give you a choice of paint: more and more models can be personalised to suit your tastes, with a contrasting roof colour, graphics, and premium interior materials. The result should ensure that no other car on the road is quite like yours.


You'll be the first owner

You won't need to worry how your car has been driven or if any scratches have been covered up because you're its first owner. You'll have complete control over how it's driven and maintained from day one.

Further reassurance will come from the full manufacturer warranty.


The latest technology and safety equipment

Some car makers update their vehicles every year as the pace of development threatens to make even newly-launched cars obsolete. For example, Bluetooth for connecting your phone wirelessly is giving way to more advanced systems, such as Apple CarPlay and Android Auto, which allow you to easily control your phone through an in-car touchscreen.

Advanced safety technology that can steer you back into your lane if you're drifting into danger is now available on the humble Nissan Micra, while automatic emergency braking is fast becoming standard. And efficiency gains are claimed to make the latest engines cleaner and more economical.

It means that there's often a marked difference between the very latest cars and those that are only two to three years old.


The very latest design 

The warm glow of knowing that you have a newly-launched product helps drive millions of sales each year - from phones to cars. And if it brings you pleasure, then you're likely to be in the market for a brand new car.


Manufacturer-supported finance deals

You can take advantage of low-rate finance on new and used cars, but the offers for brand new vehicles tend to be the most attractive. It's not unusual for new cars to come with 0% APR finance, which eliminates any interest charges.

However, you can't always combine rock-bottom rates with other new car discounts and your monthly payments may still be higher than if you bought a nearly-new model.


Discounted car care packages

Many new cars are now sold with free or reduced-price servicing for the first three years, saving you money on running costs. The savings are often only available when you buy the car, so aren't offered to used car customers.


Latest car buying advice

  1. Cash vs finance: how to budget for a car

  2. Cheaper used car tax: road tax rules before April 2017

  3. Second-hand HP (Hire Purchase finance)

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