Should You Choose a New or Used Car for Your Next Vehicle?
If you are in the market for your next car then the chances are you will have to make some important decisions before making your choice. From looking into the makes and models you are interested in, to deciding whether you need something compact or something with plenty of space for people or luggage, there are lots of things you will need to consider. For many people, one of the biggest and most important decisions they will make are whether they should buy a brand new car or a used car.
There is no right or wrong answer when it comes to deciding between new and used cars, and this is mostly because it is quite a personal choice that will depend heavily on your own unique circumstances. For example, if you have the budget available and have a preference for the latest models then you will most likely want to choose a brand new car. If you don’t mind something older and want to save yourself some money in the long term then chances are that a used car will be a better choice for you.
Having said this, there are many more factors that will need to be considered when you are making a decision on whether to buy new or used cars, and we will explore all of these in a bit more detail. We will look a little deeper into budgeting and how this can affect your choices.
Budgeting for a new car
When it comes to buying your next car then the biggest constraint for most people is their available budget. Buying a car is expensive no matter which way you look at it, but the expense does vary a lot between car makes, models and ages, as well as whether they are new or used. A new car will always cost more than a used one, unless the used car is a rare, vintage model, and this is because used cars will have depreciated in the time between leaving the factory floor and being traded in to be resold.
Depreciation on a new car can be as high as 30% of the total value in the first few years which means that if you are willing to buy used cars you will be able to save a considerable amount of money. Most moderately priced new cars bought on a PCP agreement will cost in the region of £250 - £400 per month, and will need a deposit of between 5 - 10%. If you wish to keep the car after this period ends then you will need to pay a final charge to own the car.
Used cars can also be bought on this paid monthly basis, but as their purchase prices are lower the monthly repayments will also be lower, and the final purchase price will be lower in turn. The main thing to keep in mind is that buying any vehicle of any price using a monthly agreement will mean you are subject to paying interest which can sometimes add hundreds if not thousands to your total.
As the total price of used cars tends to be so much lower than new ones, it may be possible for you to avoid paying for the car using financing options. This would mean you need to have the full cost of the car available to transfer to the seller in a lump sum, usually either in cash or by bank transfer, which can be an option for people who have the funds available or are able to save up over time to accrue the full amount.
Based on your budget alone and whether you are interested in buying a car using finance or prefer to pay for one outright to avoid monthly repayments and potentially high interest rates, you should have a reasonably clear idea of whether you will want a new or used car. To conclude, it is almost always far cheaper in the long run to buy a used car that is only a few years old and has low mileage. Where possible, it is also cheaper to buy a car outright than it is to get one using a finance arrangement.