Whether you’re buying a brand new car, or you’re sourcing a second-hand model, you will find clear-cut advantages and disadvantages to both. Ultimately, the option you choose is the definitive decision of your personal financial situation. However, it’s worth noting, that in the UK right now, the sales of second-hand cars are soaring, and have more than doubled in the last few months due to a shortage of new models. So, while the banger on your drive may now be worth more than you thought, how do you know if the purchase of another used car is the right choice for you?
Buying Used: Advantages
When considering the purchase of a used car, one of the biggest benefits is avoiding taking the financial hit of depreciation. As soon as a car leaves the showroom, it automatically loses around 20% of its original value. These days, it’s rare for a new car to be worth more than half of its purchase price after three years of being on the road. For many other new cars, up to two-thirds of their value will be wiped out in the same amount of time.
Used vehicles have also seen the introduction of longer factory warranties - this peace of mind has added to the appeal of purchasing second-hand cars no end. There’s also usually a much wider range of vehicles to choose from, with today’s most popular models being Vauxhall Corsas, Ford Fiestas, Ford Focuses and Volkswagen Golfs.
Buying Used: Disadvantages
If customisation is a priority, buying a second-hand vehicle may not be the preferred option for you. With a new car purchase, it is made to order. From choosing between whether to have a sunroof or not, to choosing your desired colour, buying a new car allows you to decide upon its features. A second-hand car purchase is the opposite - you get what you’re given, and if that means you have a radio that won’t change from Classical FM - well, it’s something you have to deal with.
In regard to the stratospheric increase of used vehicles in the current climate, it may actually cost you a lot more than expected. Good news if you have a second-hand car to sell, but it may not weigh in your favour if you’re looking for a new-used set of wheels.
Irish dealer DoneDeal reported that there’s a “reasonable chance” that a used car purchased last August will be worth more today than it was when it was bought - even with increased mileage. In the months after the intense COVID-19 restrictions, the price of used vehicles has been seen to rise so rapidly that an average second-hand car will now sell for up to 14% more than it would have done this time last year.
Conclusion - is it Beneficial For You?
If you’re in the position where you can both afford to sell your used vehicle, and repurchase another, then a second-hand car may be beneficial for you. Think to yourself - are the advantages meaningful to you, and will the decision aid or damage your finances?
While it may make sense for many of you out there, it’s not always a one-size-fits-all experience, so it’s worth taking the time to do your own situational research.