New cars CHEAPER than second hand ones? – Mirror.co.uk
Everyone knows the second you drive a new car of the forecourt, you lose hundreds (if not thousands) of pounds of its value. Right?
Well, yes, but the headline price isn’t the only thing to consider when buying a car, especially when new figures show that buying new could actually SAVE you money overall compared with a second hand car.
First come the discounts
The first advantage you have when buying new is the space dealerships have to offer discounts. Taking a SEAT Leon as an example, comparison site Carwow
found that while the list price of a particular model was £23,895, some dealerships were offering it for £3,040 less than that.
This was far from a rare thing, with discounts of thousands of pounds found on new VW Golfs and Volvos among others thanks to the flexibility dealerships have. In fact, once the dealer discounts were included, a lot of new cars were cheaper than their ‘nearly new’ equivalents which already had thousands of miles on the clock.
Second comes the financing
If you don’t have enough cash to pay for a car outright up front, you need car financing. Well, guess what, dealerships tend to offer this a lot cheaper than commercial companies.
So for the SEAT mentioned above, the dealership was offering 0% finance over three years, meaning you can spread the cost of the new car without paying a penny more.
That’s more than £1,800 less than the cost of a three-year car finance loan for the same model SEAT second hand.
Not everyone offers 0% deals, but dealers do offer finance a lot more cheaply than the market rate for a loan to buy a second hand car.
Third comes the running costs
Surely, though, if you buy a car that’s a few years old you’ll save more. Well, yes, but have you thought of the running costs?
New cars are generally more efficient, meaning you use less petrol. And that means you pay pay less car tax too. On top of that Moneysupermarket found that all the new cars they looked at cost less to insure than older cars of the same model.
Adding it all up, the comparison site found the cost of running a new Volkswagen Golf was £422 a year cheaper than a five-year-old one. A new Ford Fiesta was £351 a year cheaper than a five-year-old one and a new Nissan Qashqai was £243 cheaper.
Over a few years those savings stack up to more than outweigh the initial gap in price.
“With the drive from manufacturers to create more fuel efficient and safer models, as well as some ‘free road tax for the first year’ schemes, the cost of running and insuring a new car is often far cheaper than older versions of the same vehicle,” explained MoneySuperMarket’s Dan Plant.
James Hind, founder of Carwow, added: “Some people may think that buying a ‘nearly new’ car is their best option, because new cars can depreciate quickly, but if you’re getting a significant discount on a new model and if the finance rates are more attractive then it’s usually worth weighing up the cost of a brand new model. New cars also come with at least a three-year warranty.”