Is Buying A Used Car Better Than Buying New?
Used Car Better Than Buying New
You may be thinking that a new car will be well worth buying a used car. However, many of us don’t take depreciation into account and don’t think about how the value of new cars change over time.
What is depreciation?
Depreciation refers to a reduction in value over time, due to use and wear. This means that you could be selling your new car for half the price you bought it for in several years, whereas if you buy a used car the depreciation shouldn’t be so much. All cars will need repairs at some point, even ones you buy new. However new cars are a lot cheaper to repair than old so could save you money depending on the condition of a used car.
AA research shows that over 70% of people looking for a car this year will be after a used vehicle. But there is more that needs to be considered. For example, the reliability of the vehicle. Is buying a used car less reliable than new? Almost certainly is the answer. Although it’s not too common, there are used car dealers out there that will sell you a faulty vehicle, and this can’t really happen with a brand new car.
There are pros and cons to buying both types of vehicle. The pros of buying a new car is you know it’s in great condition. They can also be made to order and this means you can personalise your new vehicle. A brand new car means it can come with all the latest gadgets and gizmos. New technology is constantly developing, and so are our cars. Also, you can get far better finance deals on new cars because they are worth more and haven’t been affected by depreciation yet. There will be now unknown history to worry about with a new car. You know exactly where it’s come from so there’s no chance of a dodgy deal.
A used vehicle also has plenty of pros, the main one being upfront cost. We spoke to Rebecca from Georgesons Cars, who said “A used car will be a LOT cheaper than buying new. Used vehicles tend to have lower insurance rates than new so you could save even more money on this. And most importantly, depreciation won’t have as much as an impact on a used car.” With a weak economy, the price of a new car will drop quickly, a used car on the other hand, not so much.
However, there is a third option! Nearly new cars can kind of give you the best of both worlds. You can have all the modern tech and fuel efficiency along with lower depreciation. Majority of these cars will have covered a small number of miles and have been registered to one previous owner, but will still be in nearly perfect condition. Although the price of resale drops due to another name on the documents, this could still be worth it in the long run.
So when deciding between used, new or nearly new, weigh up the bonuses and the downsides and decide which is best for you.
Featured Image by Matt Parker