Which Is Better Value – A New Car Or A Used Car?

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It may seem like an obvious question – used cars cost less to buy up front. But what about in the long run? Here are some of the factors to consider when choosing between an old and a new car.

 

Sale value

When it comes to the initial purchase price, new cars are always more expensive. At used car sales you can often pick up cars for a tenth of what they cost brand new. New cars may require taking out a loan in many cases, which could also result in additional interest charges.

WINNER: Used cars

Depreciation

Depreciation is the amount a car drops in value over time. Different models will depreciate at different rates but on the whole new cars always plummet in value after a couple years of use. Used cars may continue to lose their value until they reach a certain age when they’re deemed classics at which point they may increase in value. By this token used cars can be a better investment but only after a certain amount of time (not all car models are destined to become classics).

WINNER: Used cars

 

Insurance

New cars generally come with a higher insurance premium because they’re worth more in value. Insurers also have less accident statistics to work with when it comes to new cars and are so are likely to set rates high to make up for this. That said, some new cars are far more secure and this can positively affect the insurance rate, making the risk of theft less likely. Similarly, used cars that have gone over their mileage can become more expensive to insure as engine faults are more likely to occur possibly causing accidents.

WINNER: Used cars

 

Fuel economy

When it comes to fuel consumption, new cars come up trumps over old cars. This is even excluding electric cars and hybrids – modern petrol and diesel cars are fitted with much more advanced technology that makes these cars much more fuel-efficient. Many modern cars also have fuel economy warnings to assist the driver such as telling the driver when to switch gear. Certain used cars may guzzle fuel, which could add up over time.

WINNER: New cars

Road tax

Road tax is largely based on how green a car is – by this token new cars generally have cheaper tax bands than older fuel-guzzling ones. On top of this, brand new cars are tax exempt for the first year. That said, cars over 40 years are also tax free. Road tax is only a small expense compared to other vehicle costs but some may still find that the discount is worth it.

WINNER: New cars

Maintenance costs

Used cars are likely to be less reliable and so may require more regular repairs. Whilst new cars may have less faults, replacing parts may be more expensive and electric faults may require more specialist attention. Still, overall, used cars with a lot of miles on the clock are likely to be far more expensive to maintain due to general wear and tear.

WINNER: New cars

Verdict

Used cars cost less up front and are cheaper to insure up until they reach their mileage. That said, in the long run you may be able to save money on repairs and fuel by buying a new car.

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