New Or Used Cars – Which Are Better Economically?
The decision of whether to buy a new or a used car is a tough one that every motorist faces. There are many factors that you will need to consider, but often it is an economical decision. This post will look at the key financial considerations for buying new and used cars so that you can make the right decision based on your situation.
Buying a New Car
Obviously, buying a new car will be more expensive than buying a used car in terms of price. In addition to the cost of the car, you also have depreciation to factor in as new cars lose around a third of their value after just one year. While new cars are expensive to buy, you must also remember that they will feature all the best technology and latest features. Often, this means that these cars are more reliable and could encounter fewer issues. On top of this, new cars can be highly efficient and help to keep your running costs down. An electric car may cost a lot upfront, but you must look at the big picture and the savings that you can make over the long term.
Buying a Used Car
When buying a used car, you can make big savings and also get more for your money. On top of this, you can avoid the biggest depreciation hit, which means that you will lose less if you decide to sell the car down the line. While there are clear financial perks of a used car, you must also factor in that they may not be as efficient or reliable as a new car. A used car could be more likely to breakdown and, if you do not have a warranty in place, then you will be the one that foots the bill.
In terms of keeping the car on the road, it is not always clear what the best option is. Research suggests that motorists can save 23% on running costs if they buy a new car instead of a used one. Fuel, road tax, insurance and MOT are the key costs to factor in and you might find that new is cheaper, but whether this works out as cheaper overall when you factor in price and depreciation is another matter. Insurance is one of the major running costs to cover and you should always shop around to get the best policy whether buying new or used.
Ultimately, it is important for motorists to crunch the numbers and consider what their budget is. There are financial benefits and drawbacks of both new and used cars, but it will also vary depending on the make, model, MPG, and various other factors that can influence the price and running costs.