New vs used: reasons to choose a used car

Not sure whether to go new or used? Choosing a used car over a new one can provide many benefits aside from lower cash and finance costs

Simon Ostler
Sep 20, 2021

Have you always been averse to the idea of purchasing a used car? Perhaps you're worried you might get caught out by a dodgy history or a lack of warranty? Well, there's no reason why that should ever be a problem if you go about the process in the right way.

Of course, if you take out a lease deal or have a company car, you normally get a brand-new car as part of the package. But if you’ve always had new cars and lack a little trust in second-hand models, you could be missing out on big savings, lots of technology and premium badges.

Just because a car is 'used' doesn't mean it's going to be old and battered. There are thousands of models to choose from on the used car market and some of them can hardly be considered as used at all. It's possible to find virtually new models with only a handful of miles on the clock that are equipped with all the cutting-edge tech you could ask for - not to mention years of manufacturer warranty remaining - at vastly reduced prices.

The idea of a brand new car – factory fresh and built to your own specification – is a big draw, it's not hard to see why. But the sheer expense and long waiting times involved can make putting a brand new car on the driveway an impossibility for many drivers. Even choosing a new Ford Fiesta - the UK's bestselling car - could result in a wait of several months. That alone might put you off if you’re going to be without a car for a period of time. For this reason, and many others we're about to touch on, used car purchases are far more common, with around four times as many transactions taking place every year than new car sales. And half of new car sales are fleets and company cars, so private buyers favour used cars in far greater numbers than new cars.

Don't forget, the used car market isn't just restricted to cash buyers, you can get very competitive Personal Contract Purchase (PCP) finance and Hire Purchase (HP) deals on used cars as well. With far lower cash prices and relatively low APR charges for many used car finance deals, whether you're paying cash or with finance, going for a used option should leave you with more money in your pocket.

Keep reading for the top reasons you might want to head to the used car market when you're considering your next car.

Used car prices are far lower

It seems an obvious thing to say, but used cars are cheaper to buy than brand new ones. Cars lose value as soon as they are registered. Even one-year-old cars come with substantial savings compared to a brand new equivalent, despite often having covered very few miles and being equipped with desirable extras like metallic paint and sat-nav. Of course, some second-hand cars will have some wear and tear, depending on things like their age and mileage, but this will be reflected in the price you pay. The good thing is, if you choose a popular car, there will be plenty of examples to choose from.

Not only does this mean you shouldn't have much trouble finding one with the colour, trim and engine you want, but you can also afford to be more picky about the car's condition. The term 'used' does not only refer to 20-year-old rust buckets with 300,000 miles on the clock, so spending a little time tracking down the right used car could save you thousands compared with a new car, while still seeing you sat inside a modern, good-condition vehicle.

Your expectations may well be slightly lower in a used car, too. Think about how bad it’d feel to spot the first stone chip in the unblemished paint of your brand-new car. With a used car, someone else has already gone through that so you don’t have to.

Nearly-new or pre-registered cars can give you the best of both worlds, with the car feeling practically factory fresh, the interior still smelling like new, yet the price being many thousands less than a new version. And if you're on a tighter budget, even going for a three-year-old car can practically cut the price in half compared to a brand new model in many cases.

Lower prices mean cheaper used car PCP finance

Brand new cars typically lose thousands of pounds in value as soon as you drive them off the forecourt, with certain models losing up to 20% of their value - if not more - within the first 12 months. This is known as depreciation, and typically means the first owner of a car will take the biggest financial hit when they come to sell it. So if you're purchasing a car that's already passed this stage, you will be better off as a result further down the line.

Therefore, choosing a car that’s one or two years old means you can get something fresh and well looked after, all for a far lower cost than it would have been when it was new. This is a particularly strong argument for purchasing nearly-new cars; in many cases, you are buying what essentially looks and feels like a new car, but the cost you pay is far lower - however you choose to pay for it.

This is what makes used car PCP finance deals far more affordable than new equivalents, too. With the smaller difference between the car's initial value and what it's expected to be worth at the end of the contract resulting in considerably smaller monthly payments. If you opt for Hire Purchase - where you become the owner of the car once you've made all of the monthly payments - the lower the cash price is, the less you can expect your monthly payments to be, so used cars will save you money here too.

Going used gets you a fancier car for your budget

Thanks to depreciation reducing the value of new cars as they age, going for a used car can help you jump from an unexciting and basic-level new car to a more exciting and upmarket used car for the same price. If you're shopping for a brand-new car, a budget of £20,000 won't even stretch to a basic, entry-level Ford Focus, but turn to the used market and you'll find it'll get you a larger 18-month-old BMW 3 Series with more power and extra equipment for your money - as long as you don’t mind a few miles on the clock and a car without the very latest number plate.

Choosing a used car means no waiting list

When purchasing a new car, you might be put in a ‘build queue’ or waiting list. For a number of popular models, this can run into months or even years, which means going for a brand new model to take advantage of personalisation opportunities like a specific colour scheme or equipment pack, you're likely to have to wait for it.

Go for a nearly-new ex-demonstrator or pre-registered car, however, and you can get a car that's barely covered any miles, yet is far cheaper and ready to be delivered there and then - no waiting around.

Long used car warranties offer peace of mind

While some manufacturers still limit their warranties to three years or 60,000 miles - whichever comes first - many now have much longer protection periods. Hyundai, for example, offers five years, while Kia offers seven years or 100,000 miles (whichever comes first). Toyota’s warranty cover now lasts for a whopping 10 years.

SsangYong’s warranties last for a whopping 150,000 miles and seven years, while some MGs are also available with a seven-year warranty, too, but only lasting for 80,000 miles.

The good thing about these longer warranties is that they follow the car around. So even though a car might change hands, the warranty remains valid in its entirety, meaning you could pick up a two-year-old Kia for a fraction of its original price and still be protected by a five-year warranty.

You could save money on car tax

Brand new cars feature a first-year tax rate based upon their CO2 emissions and, although this is generally bound into the on-the-road purchase price of a new car, it is a significant extra cost. The first year’s tax can sometimes be thousands of pounds. Furthermore, most petrol or diesel new cars have a standard rate of about £150 per year in tax after this point. But buy an efficient car that was registered before April 2017 and you could pay absolutely nothing in tax. Read our guide to cars with cheap tax for more information.

This tax benefit to buying used cars registered before April 2017 means that low-emission models could save you some all-important cash every year. A handful of low-emission cars that cost more than £40,000 new could even save you up to £465 per year compared with new equivalents. Examples of pre-April 2017 cars that emit less than 100g/km of CO2 - which are free to tax - include everything from many petrol city cars to the Audi Q7 diesel plug-in electric hybrid SUV, a number of diesel BMW 3 Series models and petrol and diesel VW Golf versions.


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