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

Here are a few things to consider when deciding whether to buy new or used.

Buying or selling a car

1 May 2024

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

A lot of big decisions come with big price tags. But if you don't have the money to splash on a brand-new car right now, you still have options. That’s why it’s great  there are so many dependable used car dealerships and services. But what are the differences between buying new and used, beyond the cost?

One immediate difference will be the cost of your car insurance, but not always in the way you think. Sometimes insuring an older car will be more expensive. That's because an older machine might need more visits to the garage than a new car. On the other hand, if a new car comes with all the bells and whistles – touch screen panels, sound systems, etc. 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. You'll need to give as much detail as possible about the make and model, and you won’t be able to buy a new policy until you know the registration number.

Aside from insurance and costs, what else should you consider when deciding between buying a new or used car?

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

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 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. 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 likely be a lot higher than buying used.
  • Depreciation. As soon as the tyres hit the road, the value of the car lowers.
  • Post-2017 road tax. While newer cars are arguably more reliable, depending on engine types, you might find models made in 2017 onwards come with higher road tax costs.
  • Time. Made-to-order can be an attraction - but 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 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. While you canget some great deals on new cars, if you shop around, you can still find some second-hand bargains. 
  • Availability. There are plenty of used cars out there. One of the main advantages is that they’re good to go. No waiting around for orders or to come into stock.
  • 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. You may 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. It's not always the case, but 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're arguably not as reliable as new machines. A used car may require more upkeep and maintenance.
  • Mileage. The more miles on the clock, the fewer miles the car may have left. If the car's done a large number of miles already, you might not get as much time with it 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. Technology in cars is constantly evolving, making them better machines. But, 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. Be on the lookout for non-standard items like bodywork or modifications, and always check the service history.
  • Higher interest rates. From risk to manufacturer incentives on new models, you might find 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're planning a test drive (which is recommended) you should always make sure you're covered. Many garages and dealerships will have demonstration cover, so check with them before you go for a spin.

If you have 'driving other cars' on your motor insurance certificate, you’ll have third-party cover. This means you'd be covered for the damage to the other car involved in an accident - not the one you're test driving. Don't forget, there will need to be another insurance policy place covering the vehicle you're test driving - even if you aren't named on that policy.

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. Remember 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.

If you're buying from a manufacturer or dealership, they might offer 'driveaway insurance', which is temporary cover designed to protect you as you drive your new vehicle, home. Speak to your salesperson to make sure 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 depreciation to warranties, there’s a lot to think about.

If you're still not sure which choice is right for you, take 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 the peace of mind that makes every car journey easier. Get a quote for AXA car insurance today.