Buying a new car can be cost-effective
Buying a new car could be more cost-effective than a used one, with cheaper running and insurance costs saving motorists up to 25 per cent in the first year, according to analysis from MoneySuperMarket.com.
With the release of the new ’64’ plate car registrations next week, motorists may be considering upgrading to a new car or opting for an older second-hand version, but it’s important to look at the overall cost of running the vehicle as well as the upfront purchase price.
The UK’s number one comparison site looked at five popular vehicles – Nissan Qashqai, Volkswagen Golf, BMW 3 Series, Ford Fiesta and Vauxhall Astra – and found a brand new car has cheaper running costs (including petrol, road tax, insurance and MOT) compared to a five year old model of the same vehicle.
The biggest saving of the five cars was the Volkswagen Golf, where a £422 saving could be made on the running costs of a new car, down from £1689 for a five year model; a 25 per cent saving. For a brand new Ford Fiesta (1.25L, petrol) the annual running costs are £1,237 per year, which is £351 cheaper than the costs associated with a five year old version. Similarly, a new Nissan Qashqai will cost £1,561 to run per year compared to £1,804 for a five year old model, an extra £243. In all five cases the cost of insuring the newer car was lower than the older equivalent models.
Dan Plant, consumer finance expert at MoneySuperMarket, said: “For some, buying a brand new car might seem prohibitively costly. However, with the drive from manufacturers to create more fuel efficient and safer models, as well as some ‘free road tax for the first year’ schemes, the cost of running and insuring a new car is often far cheaper than older versions of the same vehicle.
“Of course, a new vehicle will always have a higher headline price than a second hand one in the same model, but the savings you can make on running costs alongside potential deals offered on new cars by keen salespeople could outweigh that. Plus you’ll usually get a decent warranty, and that lovely new car smell!
“The cost of car insurance varies hugely depending on the vehicle you buy, so before taking the plunge on your dream ride it’s well worth doing a comparison to see what you can afford.”