Are brand new cars worth buying?
Are brand new cars worth buying?
It’s the dilemma everyone faces when they’re in the market for a new car: is buying brand new a sound investment? We’ve taken a look at the pros and cons so you don’t have to.
Advantages of buying a brand new car
First things first, everybody loves that ‘new car smell’.More importantly, it’s reassuring to know that you are the only person to have owned your vehicle, which means you can be entirely confident that you know its history and there haven’t been past accidents that could have compromised the car’s long-term safety.
Buying brand new also means you can enjoy the very latest features and technology the market has to offer. As a result, your new car is more likely to be safer and more efficient – saving you money on fuel and road tax, as well as being kinder to the environment.
You can customise a brand new car, too, from selecting the colour, to adding alloy wheels or extra tech for added ease, style and comfort.
A brand new car offers reliability and peace of mind. You won’t need to think about MOTs for the first three years, and you’ll be covered by a warranty that means it’s up to the manufacturer to fix any problems that arise.
Disadvantages of buying a brand new car
For all the advantages of buying new, there are a few drawbacks to consider.
First of all, purchasing a new car outright involves a high upfront cost and tying up a lot of money in the vehicle. If you opt, instead, for a Personal Contract Purchase (PCP), you’ll pay a large deposit, then spread the cost of the vehicle plus interest over a number of years. Unfortunately, PCP contracts have the added disadvantage of tying you into lengthy, inflexible contracts. If your needs change or your monthly payments become unaffordable, there are sizeable penalties for ending your contract early.
With either approach, the value of the car will decrease over time thanks to depreciation. This means that should you then decide to sell, it’s unlikely that you’ll get back the full amount you paid. In fact, it is estimated that cars lose 20% of their value the second they leave the forecourt.
Last but not least, brand new cars frequently have lengthy lead times for delivery. Depending on the general demand for the specific make and model you select, you could find you’re waiting months before your new car becomes available.
Factors to consider when deciding to buy a brand new car
If buying a new car is right for you, there are a few things to bear in mind that will help you to get the best deal available.
First up: finance. Whether or not it’s the right time to buy a brand new car will depend on your circumstances and establishing what you can afford should be based on the total cost of ownership. It’s easy to focus solely on the asking price, but it’s crucial that you calculate the real costs of owning your chosen vehicle before you sign on the dotted line. On top of the cash you invest and your monthly repayments and interest charges, you’ll need to consider monthly running costs including fuel, insurance (which can be higher for newer vehicles, because they’re more attractive to thieves),servicing and breakdown cover.
If you’re looking to spread the cost, you might consider PCP. Although you’ll still make a sizable upfront payment, fixed monthly charges across your lease help spread the cost. You’ll also need to make a large lump sum payment at the end of your agreement if you decide that you’d like to keep the car. In the short term, though, leasing a vehicle will likely prove more manageable on a month-by-month basis. It’s important to remember, however, that you’ll typically be tied into a contract for between two and four years, which can be difficult and costly to get out of, if required. To find out more, read our post about the different types of car lease available.
Tips for getting the most value out of a new car purchase
Buying a brand new car is a costly process, but there are things you can do to make sure you get maximum value from your investment.
First of all, make sure you research your options thoroughly so you can be confident you’re choosing the right car.
Next, always negotiate. Wherever you go to buy your car,arrive prepared, having done your research about the offers available across the market including from dealerships and online. Remember they want to sell you the car as much as you want to buy it, and there’s usually an element of wiggle room, whether that’s on price, accessories or extras.
Also keep an eye out for incentives and promotions.Periodically, manufacturers will give specific models a push, with 0% interest,deposit-free offers and usually-costly extras such as EV home chargers,included for free.
Once you’ve bought your brand new car, keeping it in immaculate condition for as long as possible will go a long way towards protecting your investment. Stick to your servicing schedule and get any potential issues seen to as soon as they arise, and you’ll give your car the strongest chance of staying in the best possible condition for its age. Driving safely and smoothly will also help reduce wear and tear on components, and storing your car in a garage to protect its paintwork is ideal.
Depreciation is impossible to avoid, but you can minimise its financial impact by choosing a car more likely to hold its value. Look for fuel economy, safety and colour as key factors affecting resale value. Keep mileage low and maintain a full service history – ideally from an approved garage - to hold your car’s value for as long as possible.
Finally, and crucially - don’t be tempted to modify your new car in any way. Modifications send resale values plummeting and make insurance premiums shoot up, further lessening your chances of a favourable sale.
So, should you buy a new car?
New cars offer safety, comfort and the very latest features and technology. But whether a purchase is right for you is an entirely personal choice, dependent on finances, personal circumstances and what you need a car to provide.
Having said that, there’s no doubt that the main obstacle to purchasing a newer vehicle for most people is cost. Particularly in today’sever-shifting climate, predicting your needs and what you can afford on a monthly basis can be difficult.
If that feels familiar, it may be worth considering a different approach to driving altogether. Car subscriptions offer new vehicles for minimal upfront costs with no long-term contracts and none of the hassle.To find out more, take a look at our range of new cars, find one that best meets your needs and complete our simple online sign-up.