New Cars v Second Hand Cars
Because buying a car is such a big decision, it's advisable to consider what you want from a car, how much you can afford to spend, where you should make your purchase, all of which will help to avoid unforeseen problems in the future. When you take the amount you can afford into account, it is advisable to include the costs of insurance, MOT, road tax, fuel, servicing and repairs. If you intend to take out a loan to finance the purchase, you should also add the repayments to your calculations and include any protection insurance.
Take time with your decision - consult car magazines and price guides to see what you can buy for the price you want to pay, and also ascertain the value of the car you want to trade in if you have one. For some, the decision between buying a new car and a second hand one is made for them, especially if it is a company car. But if you are buying a car for personal travel only then the pros and cons of new and second hand cars will sway your decision according to your priorities.
Brand new vehicles can lose up to 20% of their value from the moment lthey eave the showroom, and approximately 40% within three years. That said, they do allow the purchaser to choose the exact car and specification they want and they add certain kudos with their brand new registration plate and style. They come with a full warranty (usually three years) and the owner should not have to worry about reliability and the costs of repairs during this time. Essential car parts like brakes, tires and batteries should not need replacing for a long time. There is no requirement for MOT checks for the first three years from manufacture, and many car producers offer 'lemon law' protection. This entitles the owner to a brand new replacement car or at least a full refund if the car turns out to be a dud. New cars almost also offer the additional benefit of their own branded roadside assistance programme, which is usually free during the warranty period, and often ensures you will have a courtesy car whilst your own car is repaired.
However, new cars do have their disadvantages. Depreciation is the single biggest destroyer of buyers' finance and this only becomes fully evident at the time of selling. Those customers who buy their new car with a car financing or credit agreement may purchase guaranteed asset protection (GAP) insurance. This agreement will pay the owner the difference between what is owed on the vehicle and an insurance company valuation in the event of it being stolen or written off. It is advisable to establish whether the particular model you have in mind is about to be updated since the production of a newer version will affect the value of an older style.
If money is a major consideration, there is no doubt that it is usually much cheaper to buy a car second hand than brand new, and second hand buyers also avoid the instantaneous depreciation as with brand new cars. Furthermore, as a particular model of a car becomes more widely known, there will be more reviews and information about their performance and reliability, which offers a great deal of information for would-be purchasers. New models of car can be less known and there is therefore a certain element of risk involved in making the purchase.
The costs associated with both new and used cars are quite possibly tipped in favour of new cars. They may incur higher insurance premiums and registration costs but the bills that are to be expected with a used car for repairs and replacement parts will probably be much higher in the long run. This is not helped by the lack of warranty offered on second-hand cars –some used car dealers will offer a warranty of between three and six months but a private seller will not.
Until quite recently, it could be argued that a brand new car would be safer than a used one because of newly developed safety features but, over time, the second hand cars on the market offer comparable standards of safety if they have been well maintained and serviced.
It is always worth consulting popular consumer magazines such as "Which?" where you will find independent reviews on a whole variety of cars which could help you make a decision. Having a shop around with a number of dealers may be a little time consuming but you may find an even better car within your price range.