Is it better to buy a nearly new or used car?

Nearly new cars vs used cars

While you’re likely familiar with new cars, the term ‘nearly new cars’ may be unfamiliar to you. As the same suggests, these cars are only a few months to a year old and have barely been driven. They may be ex-demo cars used by the dealership for display or test drives, or they could have been given to customers as a courtesy car when their vehicle was in the garage. Either way, these cars don’t have a lot of miles on them and have minimal wear. 

Nearly new cars appeal to those looking for a new car but don’t want cover the full cost of new car depcretiation, which is typically at its steepest in the first few months after registration. They are heavily discounted while offering many of the same benefits of driving a new car, such as warranty coverage and the latest tech. 

In contrast, a used car is an older vehicle that has had at least one private or company owner since it was brand new. These cars generally come at a lower price than comparable nearly new models, though some wear and tear may be expected. However, they tend to depreciate at a slower rate.

You may be wondering, should I buy a nearly new or used car? This depends on your situation and personal preferences, but looking at the pros and cons may help you decide. 

Pros of buying a nearly new car

Should I buy a nearly new car? When buying a nearly new car, you have access to warranty coverage and the latest technology. Also, the new or nearly new car offers better finance options, is more reliable, has advanced safety equipment and can be more fuel efficient. 

Warranty coverage

Comparable to a new vehicle, a nearly new car includes the manufacturer’s original warranty. With this car warranty, you get coverage for unexpected repairs over the first few years of ownership. 

New technology 

Nearly new cars have advanced technology that may not be available in older models. The nearly new car may include a larger, more responsive touchscreen display, wireless device charging and Apple CarPlay or Android Auto. 

Better finance options

Lenders and dealerships offer better financing rates for nearly new cars than with used models, such as PCP finance and hire purchase finance, because they are similar to brand-new vehicles. They are much easier to get financing for than older cars. By using our car finance calculator, you can explore the available finance options. 

Reliability

As a nearly new car has barely been driven, it will be reliable. Usually, a nearly new car only has one previous owner or was owned by the dealership you’re buying it from. It may have only been used for test drives or as a display model. 

More fuel efficient

Newer cars tend to have better fuel efficiency than older models because of fuel-saving innovations, helping you save on fuel costs. While figures depend on the brand and model, you can find some of the best fuel-efficient cars in our inventory. 

Latest safety features

The car safety features in a new vehicle are more advanced and offer better protection than those in older cars. Some examples include advanced braking systems, adaptive cruise control and lane-keeping assist. 

Cons of buying a nearly new car

While there are many perks to buying a nearly new car, there are also some drawbacks to consider. There will  be significant car depreciation, a higher price, it will be more expensive to insure, and you may face a limited selection of available models. 

Car depreciation

In the first few years of ownership, nearly new cars experience similar depreciation to a brand-new car. While you will avoid the initial post-registration loss, even 6-month old cars will typically lose value at a quicker rate than a car that is a few years old, impacting the amount you’ll recoup when you’re ready to sell. Car depreciation varies by model, and driving high mileages can depreciate the value faster. 

Price

While it will be less expensive than a new car, the nearly new vehicle is going to cost significantly more than a used model because it has been barely used. The condition is almost like-new with very low mileage, and there’s still a factory warranty included, which contributes to the higher price. 

More expensive to insure

Car insurance for the nearly new model is going to be comparable to a new car because of its higher value. Insurance rates are influenced by the car’s age, insurance group and repair costs, making the nearly new car a more costly option to drive. 

Limited selection of models

Nearly new cars are harder to find than used models, so you may be limited to a small range of types and trims. Overall, the options available may be restricted, so you may not always be able to find the features, colours and configurations you want.

Pros of buying a used car

Buying a used car helps you keep the cost down. It also allows for slower depreciation and lower insurance costs. While shopping, you have a greater variety of options, allowing you to find something customised to your liking. 

Lower upfront cost

A used car is significantly cheaper than a newer model, making it more affordable for buyers who are sticking to a budget. In fact, it may even be possible to find used cars under £1,000 if you are trying to save money. 

Slower depreciation

When you buy a new car, there is a lot of depreciation in the first couple of years. With a used car, the depreciation rate is much slower, making it a better investment over time. By retaining its value, you will be able to recoup some of the cost when you sell the car to get a newer one. 

Lower insurance costs

The lower market value of a used car can sometimes equate to cheaper car insurance, helping buyers save even more on monthly costs. By purchasing the cheapest cars to insure, you can keep your insurance costs to a minimum. 

Better variety of options

The used car market offers a wider variety of models, years, makes and options compared to nearly new or brand-new cars. Buyers are able to explore more colours, features and configurations, with these options often unavailable in new cars if they have been discontinued. 

Cons of buying a used car

While there are many benefits of buying a used car, there are a few cons to consider. For example, most used cars come with little or no warranty, there are higher maintenance costs, the condition of the vehicle could be poor, and the technology and features are older. 

Little or no warranty

The majority of used cars don’t come with a warranty or they have minimal coverage, leaving buyers to deal with any unexpected repair costs. Budgeting for maintenance and repair expenses helps to alleviate some of the burden.

Higher maintenance costs

While a newer car requires minimal maintenance, a used car is going to need more work. Because of the age and wear, the manufacturer will recommend more maintenance, leading to higher service costs. 

Condition of the used car

With used cars, there could be hidden damage or wear. Therefore, it’s important that a mechanic inspects the car before purchasing to avoid costly repairs after the sale. A car history check can also reveal any hidden past that the car may have, such as being crash damaged/repaired or previously stolen.

Older technology and features

Older cars may lack modern technology and advanced features, such as a newer infotainment system, fuel-efficiency improvements and innovative safety features. While you can install some aftermarket options, such as a touchscreen display, these will cost more. 

Limited finance options

It can be more difficult to get financing for a used car. Finance deals don’t tend to be as good as new cars, and you may have fewer loan options and higher interest rates when compared to nearly new and new cars. Also, lenders may be more apprehensive about financing older, high-mileage vehicles, leading to higher interest rates. 

Things to consider when deciding to buy a nearly new or used car

So, should you buy a nearly new car or a used car? This depends on your budget, long-term costs, your lifestyle, the vehicle’s condition and service history. You have a lot to consider before making a decision.  

Your budget

Analyse how much you can comfortably spend. Consider not only the purchase price, but also the additional expenses, such as taxes, financing fees and registration. Buying a nearly new car is going to be more expensive upfront, but there may be fewer long-term costs compared with buying a used car. 

Long-term costs

Factor in the money needed for maintenance, unexpected repairs, fuel consumption and insurance. While the used car may save you some money upfront, is it still going to be cost-effective after major repairs are needed? If a vehicle comes with a warranty, it may help you save money in the future, but cost more upfront. 

Your lifestyle

Evaluate your needs before choosing a car type. For example, do you need a fuel-efficient car for commuting or a spacious vehicle for family travel? You wouldn’t want to buy a two-seater convertible if you’re planning to carry a lot of cargo every day. Our guide to car types can help you find the best vehicle for your lifestyle. 

Vehicle history and condition

When buying a used car, it’s important to check the vehicle history and condition. Get a mechanic to look over the car to ensure it’s in good shape. You should also get a vehicle history report to see the service records and previous accidents. 

Find a new or nearly used car with MOTORS

There are many pros and cons to consider before buying a new or nearly used car. While buying a nearly new car is going to be the more expensive option, it allows you to drive a vehicle with the latest technology and features while ensuring that your maintenance and repair expenses remain lower. On the other hand, a used car can help you stay on budget upfront, but could cost more if anything fails mechanically. It’s therefore important to reference our Buying a Used Car Checklist when searching for a vehicle. We make shopping for a nearly new or used car easier.