New vs a used car – what is the best choice for you?

When looking to purchase a car, there are many options, here are a few things to consider when buying new or used.

Buying or selling a car

13 December 2021

Buying a car can be a big decision for anyone. It’s a significant moment for many, and especially if it’s your first car.

However, with a lot of big decisions, big price tags can follow. That’s why it’s great that there are so many dependable used car dealerships and services. So, if you don’t have the money to splash on a brand new car right now, you still have options. However, there are differences between the two, beyond the cost.

One immediate difference will be your car insurance costs, but not always in the way you think. Sometimes insuring an older car will be more expensive as an older machine might need more visits to the garage than a new car. But, on the other hand, if a new car comes with all the bells and whistles – touch screen panels, sound systems, smart assistants, automated safety equipment – these gadgets could increase your premium.

Each car has its nuances, which is why it’s important to answer any insurance questions as fully as you can. For example, if you can’t provide the car registration, you must give as much detail as possible about the make and model as you can. Even then, you still won’t be able to buy a new policy until you know the registration number.

But, aside from insurance and costs, what else should you consider when deciding between buying a new or used car. What’s the best option for you?

What you should consider when buying a new or a used car

With any big decision, there’s a lot of factors to consider, and cars are no different. Here we discuss the pros and cons of both new and used, so you can make an informed decision that’s best for you.

Advantages of new cars

New car illustration

You get what you want – typically, new cars are made to order. You can get the model you want, the colour, doors, and the latest technology like rearview video, parking assistance etc.

Reliability – generally, you can assume that a new car will be a fine-tuned machine. You shouldn’t have to worry about mechanical issues or wear and tear causing you problems.

Finance deals – with new cars obviously being more expensive, you’ll often find manufacturers and dealerships willing to provide competitive finance packages.

Longer warranties – again, with new cars being more reliable and safer, many dealerships and manufacturers are willing to offer longer warranty periods.

Resale value – while you obviously wouldn’t make all your money back if you were to sell, you’d still get a lot more selling on a car you bought new.

Disadvantages of new cars

Higher costs – while you may be able to get a good finance package, if you were looking to buy outright, the price would undoubtedly be a lot higher than buying used.

Depreciation – as soon as the tyres hit the road, the value of the car lowers. And this depreciation arguably continues at a fast rate if you bought the car new.

Post-2017 road tax – while newer cars are arguably more reliable, depending on engine types, you might find that models made in 2017 and onwards come with higher road tax costs.

Time – as much as made-to-order can be an attraction, it can also be a drawback. You can end up waiting a long time for the car to be made and then delivered.

Not new forever – everyone loves that new car look and smell, but it might not stay that way long. Wear and tear and general use means that the new car feel might be short-lived.

Advantages of used cars

Used car illustration.jpg

Lower cost – probably the most obvious advantage of buying a used car is the lower cost. You won’t have to pay through the roof like you might have to with some new models.

Availability – there are plenty of used cars out there, and one of the main advantages is that they’re good to go. No waiting around for orders or to come into stock. What you see is what you get.

Lower road tax – on the flip side to new cars, models made before 2017, again depending on engine type, could be subject to lower road tax costs.

Certifications – with used cars being such a popular market, you’ll be able to find manufacturer-approved used cars. These approvals can give you a bit more peace of mind with the purchase.

Depreciation – if you plan to sell on the car, the bulk of the depreciation will have already been and gone. This means you’ll be able to recover more of your original outlay.

Warranties – while not the case in every instance, many dealers may extend an existing warranty, or even provide a new one on used cars. Disadvantages of used cars

Less reliable – with used cars being, well, used, they are arguably not as reliable as new machines and may require more upkeep and maintenance.

Mileage – the more miles on the clock, the fewer miles the car may have left. If there’s a large number of miles already, you might not get as much time with the car as you wanted.

Fuel efficiency – older models get fewer miles per gallon than new cars. On top of this, the fuel efficiency may even decrease the more the car is used.

Out of date – the technology in cars is constantly evolving, making them better machines. However, with used cars, what’s there is what you get. And what’s there might be out of date.

Previous owners – you don’t know what a previous owner has done to a car, so be on the lookout for non-standard items like bodywork, and always check the service history.

Higher interest rates – for a number of reasons, from risk to manufacturer incentives on new models, you might find that financing for used cars is typically higher than that of new vehicles.

Don’t forget to cover your car before you drive home

If you are planning a test drive – which is recommended – you should always make sure you are covered. Many garages and dealerships will have demonstration cover, so check with them. Alternatively, if you have ‘driving other cars’ on your motor insurance certificate, you’ll also be covered.

Whether you go with a new or a used car, you have to get the car home - assuming it’s not on order and being delivered. It’s important to remember that it’s a legal requirement that your car is insured for the drive home. Even for that potentially short drive, you need protection in place.

Driveaway insurance is typically offered and arranged by the manufacturer or the dealership you’re buying from. Be sure to speak to your salesperson to ensure that you’ll have the necessary insurance in place to take the car off the lot without worrying about it.

And don’t forget your old car if you have one! If you’re planning on selling it, many insurers offer temporary cover, which allows you to continue covering your existing car until it’s sold.

Motoring your way

While there’s no definitive answer to whether you should buy a new or used car, there’s plenty to consider. From costs to insurance, and from depreciation to warranties, there’s a lot to think about.

We’ve discussed a lot of the main considerations above, and you can have a look at our guides to buying a car for some extra information.

We want your car buying journey to be a smooth one. And we want that to continue once you’re on the road. With AXA Car Insurance, we can help with that peace of mind that makes every car journey easier. Get a quote for AXA car insurance today.