In 2018, the UK bought just shy of 8 million used cars. Compare that with just under 2.4 million new cars bought over the same period and it begs the question: why are used cars so much more popular than new ones?
With the rise of reliable, bargain car supermarkets like Fords of Winsford, used cars are arguably more popular than ever. Here’s a look at the factors involved in why second-hand cars are outselling their new counterparts by three to one.
Let’s get the most obvious thing out of the way: buying second-hand will save you a boatload of cash. Regardless of what car you buy, the price difference between new and second-hand will sit comfortably in the thousands.
That’s money that can be spent on all sorts of other projects, whether it be fixing up the house or buying yourself a brand-new TV, and you’ll still have a good car that gets you from A to B.
Avoid the Finance Vortex
If you do go for a new car, chances are you’ll have to do so on finance. A car finance plan involves a large deposit up front, followed by monthly payments (usually £150-£400) across a period of typically two to four years.
Once that period is over, you have the option to pay off the remainder of the car’s value (with interest) to buy it or move on without the car, most likely to a brand-new finance deal. That means you could pay upwards of £10,000 to effectively ‘rent’ a new vehicle, before doing the very same thing again with a new model.
Buy a second-hand car upfront and it’s yours for good. No monthly payment burden, no interest and, most importantly, no getting stuck in the finance cycle.
The second you drive a new car off the forecourt, its value plummets. Depreciation on new vehicles sits at around 15-20% a year, with the depreciation figure dropping off slightly every year after.
Buying a used car means you get to take advantage of that significant depreciation, plus the vehicle’s rate of further depreciation will be much smaller.
Enjoy the Same Perks
Once upon a time buying new had a distinct advantage in that you were afforded service plans and warranties on your vehicle that simply didn’t exist in the used car market. Now, with the right deal, you can still enjoy those perks.
If you shop around, you may be able to find a vehicle still within its warranty. Likewise, a reputable, trusted dealer will offer their own guarantees to give you extra peace of mind on your purchase.
Enjoy an Upgrade
As mentioned above, saving big on a used vehicle will give you thousands to spend on whatever you want. You could, of course, use that extra money to buy a car you could otherwise only dream of buying new.
If you’ve budgeted for a new car, take a second to look at what options might be available to for the same price in the used market. Thanks to the depreciation factor, you might be surprised by what you can get.