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10 Feb 2021
Jamie Gibbs Alice Campion

Should I buy a new or used car?

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Someone signing paper work while car keys sit on the table eager to be used.

We look at the pros and cons of buying a new, used or nearly new car. 

There are benefits to buying either a new or a used car. 

With a new car, you’ll get a vehicle with the latest technology, and its emissions will probably be low. 

A used or nearly new car is likely to be cheaper and won’t lose value as soon as you drive it off the forecourt. 

But which is the better option? We look at the pros and cons of used, new and nearly new cars to help you decide. 

 

What's in this guide?

 

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Has Brexit impacted vehicle prices?

For car enthusiasts, the risk of a no-deal Brexit brought uncertainties around car prices. 

If the UK and the EU hadn’t been able to make a deal, manufacturers would have had to pay a 10% tariff on importing and exporting cars. Causing car prices to rise. 

As we made a deal with the EU, car prices won’t be affected. 

 

How can I pay for a new car?

Whether you’re buying used or new, there’s a range of ways you can fund it. 

One of the most common options is through car finance. 

Some dealers will offer you a finance deal once you’ve decided on your car. But you can often save by shopping around and getting a loan before you enter the dealership. 

Our guide on car finance can give you more information on this.

Some other ways to fund your car include:

  • Personal leasing 

  • Buying a car with your credit card 

  • Using your savings. 

Each has pros and cons. Our guide on cost effective ways to buy a car can help you decide.

 

Should I buy a new car?

You can buy new cars from dealerships, even online. 

One benefit of buying new is that you’ll get a car with the latest technology. Important safety features like stability control could prove to be life-saving.

Developments in technology around fuel efficiency are useful too. 

Manufacturers are always improving emissions on new models. You might benefit from lower tax rates as a result. 

A new car is like a blank canvas, so you can choose exactly what features you want in it. For example, manual or automatic. 

You’ll also have a warranty which usually lasts for three years. So, if there’s an issue with your car you can get it repaired or replaced. 

But there are some drawbacks with new cars, for example, depreciation. This is the difference in price from when you buy the car to when you sell it on. 

This is much steeper with a new car, as the car starts to depreciate as soon as you drive it off the forecourt. 

The level of depreciation varies between make and models. It also depends on how the car is driven. Typically, a new car can lose 50% of its value in the first three years. 

You can read our guide on depreciation for more information.

 

Pros Cons

You choose the specification.

Depreciation can affect resale value.

New cars will usually come with the latest safety and fuel-efficient technology.

 

You’re protected by a warranty. 

 

 

Should I buy a used car?

You can buy a used car from a dealership or a private seller. 

You’ll lose less money to depreciation buying used. Most depreciation happens in the first three years of the car’s life, so buying one over three years old might save you some money. 

Most dealerships will offer a warranty if something goes wrong too. 

Again, there are downsides. If you’re buying new, you know the car has come straight from the manufacturer to the dealership. Any used car you buy will have had previous owners. 

You don’t have the same security if you buy through a private seller. They won’t offer a warranty, so if there’s an issue any repairs could come out of your own pocket. 

Make sure you check all the paperwork that comes with the car.  

There are also some key questions you can ask too.

Some dodgy sellers will tamper with the car’s odometer, making the mileage seem lower. This is known as clocking. 

Luckily you can now check a car’s history relatively easily, but it’s still something to be aware of. 

Make sure you read up on your rights before you buy a used car. 

READ MORE: Your rights when buying a used car

Pros Cons

You don’t lose as much money to depreciation as you would if the car was new. 

You don’t know the car’s history. 

Manufacturers sometimes run schemes with dealers – great if you’re looking for a certain model.

Buying privately can sometimes be risky, as you don’t have the same assurance that a dealer can offer you. 

Some dealers offer a warranty period on their used cars. 

 

Often cheaper than buying a new car. 

 

 

Should I buy a nearly new or pre-registered car?

The final option is buying a nearly new or pre-registered car. 

Buying a nearly new car means the car has been used for demonstrations or it has previously been leased. 

Pre-registered cars are slightly different. These cars have never been owned by a person. They belong to the dealer. 

Most dealerships will buy cars to meet sales targets and register themselves as the owner. 

Usually these cars haven’t been driven anywhere. So, you’re getting a new car for the price of a used one. 

You might find you’ll lose money if you decide to sell the car, as technically it will have had two previous owners instead of just one. 

Read our guide on pre-registered cars for more information.

If you’re buying a car that’s been previously leased or used as a demonstration model it’ll have covered a few thousand miles. So, you won’t get that new-car feel. 

For both nearly new and pre-registered cars, you won’t be able to choose the specification.

The dealer usually picks a specification that appeals to a mass market, so this might not be such a bad thing. 

 

Pros Cons

Pre-registered cars have low or zero mileage. 

The dealership counts as an owner, so it could affect resale value.

Nearly new cars have a low mileage. 

Nearly new cars usually have a few thousand miles on the clock. 

Cheaper than buying new.

You won’t be able to choose the specification. 

Technically used, so you won’t lose as much money to depreciation. 

 

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