Buying a new car - is it worth it?
There are so many myths surrounding buying a car. The dilemma is do you buy new, used or nearly new? And what are the benefits and possible pitfalls of each option?
New cars lose a percentage of their value immediately after leaving the forecourt whereas in theory a one year old car has already taken the hit allowing you to pay a reduced price.
This isn't entirely true unfortunately. A used car will in effect cost you more to run after the third year as maintenance costs increase with the annual requirement for MOTs and parts needing to be replaced in accordance with the manufacturer’s service schedule.
Below we run through the pros and cons of buying new or used, as well as the middle ground of buying a nearly new.
Option 1 - Buying New
Newer cars are often more efficient meaning that an initial outlay on a newer car is likely to get you something which is more economical and saves you money at the pumps. The technology covering emissions and fuel consumption is advancing constantly making this the quickest way to see savings on a car.
Our last blog post drew attention to the best cars on the market which hold their value. This is a good starting point if buying new and wanting to guarantee your cars resale value is strong.
Increasingly new vehicles are being sold with longer term manufacturer warranties. It’s always a good idea to look into the small print as certain aspects of the car will still be time limited for cover.
You do have the added luxury of choosing the exact specification in paying for a brand new car meaning technophobes can keep the technology to a minimum and gadget geeks can load the car (budget permitting) to their heart's content.
There are also various "sweeteners" which might be thrown in by the dealer and you can often negotiate added extras which may have otherwise cost you money. Paint protection and scotch guarding of the interior are popular dealer add ons but be wary if you do have to pay as this usually contracted out by the dealer and priced with some commission built in for them.
The major advantage of a new car is the lack of previous (and more importantly unknown) vehicle history.
Option 2 - Buying Used
Buying a used car from a dealer, whether manufacturer approved or independent can offer a high quality, wide range of used cars and can give you better back up if you have any problems.
Private purchases or auctions can mean negotiating lower prices. However it is worth proceeding with caution as genuine bargains can be rare and there is little or no comeback if anything goes wrong.
The riskiest part of buying a used car is the resulting uncertainty about its history. Obviously buying a car which has been serviced as per the manufacturers recommendations will go some way to increasing your faith in it. However, even now, clocking (altering the recorded mileage on a vehicle) is an issue but you can at least have a history check completed before purchasing the car, most easily by a reputable online company.
Option 3 - Buying Nearly New
Increasingly buyers are looking at ex-demonstrator or pre-registered vehicles. These have been used as part of a dealers fleet of vehicles as a way to save money on the cost of a car whilst obtaining the benefit of a modern, fuel efficient car.
It can, for these reasons, seem like "the best of both worlds" but it is still worth considering a few things.
Firstly as the car has been registered to the dealership, usually to meet targets, this does mean that there will be an extra name on the registration document which can have an effect on the car's resale value.
Whilst you won't have a lot of say as to what features the vehicle has, as these will have been chosen by the dealer, they will most likely have picked desirable optional extras which benefit rather than hinder the vehicle's residual value.
A good tip is to check the vehicle's build date before purchasing, as whilst you may be purchasing it in 2014 it may actually be a 2013 model which can also impact on the value of the car when you come to sell it.
When it comes to buying a car you can take advice but ultimately it will be what is best for you and your budget that will dictate the route you take. Whatever you buy, shop around for deals as by putting in the effort you'll have a bargaining tool and have the knowledge that you've obtained the best deal you could. And however you buy your car, don't forget your GAP insurance to protect your new investment.
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