Make, model, colour, spec, fuel type, cost, condition – there’s a lot to consider when buying a new car. On top of these specifics you’ll also have to consider if you want to buy a new or used car – and deciding which is best for you can be tricky.
To help you make an informed decision we’ve listed a few of the pros and cons of buying a new, used or nearly new car:
New Car – Pros
Warranty – One of the big advantages of buying a brand-new car is that it will have a full warranty package (normally between three and seven years depending on the manufacturer) which provides reassurance that any major faults in your car will be repaired by the manufacturer.
Specification – with many new cars you get to choose exactly what you want in terms of trim level, colour, engine size, in-car entertainment and even safety features such as reversing camera. This allows you to customise your own car, so you don’t have to compromise on the things that matter to you.
New car scent – for many this is the biggest draw of all when buying a new car. With unblemished interior and paint work, there is something intrinsically appealing about the look and feel of a brand-new car and what’s better is that there is no unknown history to worry about.
New Car – Cons
Depreciation – new cars don’t hold their value as well as used vehicles. A new car will lose a greater value of its purchase price over the first 12 months of ownership than a used car. According to moneysavingsexpert.com an average car will lose around 27% of its value in the first year.
Waiting time – if a new car has been ordered from the factory it can sometimes take weeks or months before you can get it.
There are 2 main types of nearly new car on the market: ex-demo and pre-registered. A nearly new car will only have one previous owner recorded, either:
A dealer, wholesaler, manufacturer or fleet manager, or
A person who has bought a car to immediately re-sell it
Nearly New Car – Pros
Best of both worlds – It gives you all the benefits of a new fuel-efficient car but takes away a huge slice of the new car depreciation – possibly saving you thousands of pounds.
Warranty – You still benefits from the time left on the manufacturer’s warranty should the car have any major faults e.g. If the car was originally sold with a five-year warranty and you buy it when its one year old, the car will still be under warranty for 4 years.
Nearly New Car – Cons
Limited selection – you won’t have the same level of choice you would when buying a new car, and in terms of specification (engine size, trim etc.) you’ll only be able to choose from what’s available.
Extra name on the registration document – even when buying a pre-registered car with zero miles on the clock, you are still listed as the second owner – the car dealership being the first. According to WHATCAR? this can reduce the re-sale value of the car.
Used car – Pros
Price – Your money goes further. You may be able to buy a top spec used car compared with buying a brand-new entry level new model with much less mod-cons.
Depreciation – Its estimated that most cars will lose around a third of their value after 1 year. Although a used car will lose some value, it will be nowhere near the same amount as a brand-new car.
Choice – According to the AA around 7 million used cars are sold each year in the UK outnumbering new car sales by around 3 to 1. This offers a massive selection of choice and is a definite advantage to buying a used car.
Used car – Cons
Uncertainty – you have no way of knowing the cars history. It may have had a hard life or even worse – the recorded mileage may have been interfered with, so you are unsure how many miles it’s done. It may be worth while paying for a vehicle history check (known as an HPI CHECK) which helps uncover a cars hidden past such as: if it’s ever been written off, if it’s been recorded stolen or if it has any outstanding finance (meaning the finance company would still be the legal owner).
Warranty– many used cars will be out with the manufacturer’s warranty meaning you’ll have to cover the cost of any major faults.
Condition – You may be lucky and find a used car in pristine condition however many used cars will begin to show dents, scratches and general wear and tear that the miles on the odometer would suggest.
Please check first that you are eligible to apply:
You are aged 18 or over
You have a UK bank account in your own or joint names
You are a permanent UK resident
You have never been bankrupt or had a Court Decree
To complete your application you will need:
Your current employer's address details
Details of monthly income and outgoings
Bank or building society details (sort code and account number)
To enable us to make a decision on your loan application we will contact Credit Referencing & Fraud Prevention Agencies. This will register a search against your credit record and if your application is successful we will share the information we hold for you with these agencies. Further details are available in our Fair Processing Notice
It is important that you read the Fair Processing Notice document above. If there is anything that you do not understand, please contact us.
Please be aware that the longer you take to pay back a loan, the more you will pay back in interest. If you go for a shorter term your monthly repayment might go up, but you'll save in interest and pay back your loan faster.