New Car Fever: Is It Worth the Hype?
Right now, thousands of drivers across the UK are counting down the days to 1 September when they can drive their brand-new 74-reg cars off dealers' forecourts. The month is the second time in the year when the year-identifier changes, the first being March. The aim is to smooth out demand but both changes are still a big draw, especially among private new car buyers keen to get behind the latest models and perhaps to show off a little to their neighbours…
Are they sufficient reasons to choose a new car over a used one that has been part-exchanged and which has lost the bulk of its value in depreciation, so is much cheaper? It's easy to think so but examine the benefits of a new car and you might be persuaded to buy one yourself…
Benefits of buying new
You get the very latest model. Typically, manufacturers update their cars before the plate change to encourage sales. Depending on the updates, the car may be facelifted or have lots more features for only a modest increase in its price.
Great deals. The volume of private car buyers are down, so car makers are throwing everything including the kitchen sink to entice them back: low-rate finance, generous PCP deposit contributions, discounts averaging 10% and often much more – you name it they're all on the table.
New cars come with a warranty. Kia offers up to seven years' of cover but most manufacturers provide three. Either way, apart from issues caused by normal wear and tear, you can forget about forking out for expensive repairs.
More efficient. Being the latest version, a new car is likely to be more efficient so cheaper to own and, thanks to the new safety kit now being fitted as standard to new cars not only safer but possibly cheaper to insure, too
You get to choose the perfect spec. With a new car you get to choose exactly the trim, features and colour you want and, ideally, the spec that subsequent owners will desire when you sell it on, so choose carefully.
You're the first owner. Practicalities aside, it's nice being the first owner of anything but especially of a new car. It's something to be proud of and that no one else has driven or abused.
Those are the benefits of joining the September new car rush but what about buying a used car instead? The fact is, all those new car sales will generate an almost equal number of part-exchanges. The early bird catches the worm and canny buyers will visit dealers in the weeks leading up to the plate change to enquire what part-exs they're expecting. You're unlikely to be able to see the cars until they arrive during September and then only once they've been prepared for sale but make sure the dealer knows you're interested and to contact you the minute the car is ready for viewing.
Alternatively, make sure in the weeks immediately following the plate change that you keep an eye on the classifieds and dealer forecourts. Be ready to strike, though. Annual new car registrations are down around 20% compared with their pre-pandemic levels, meaning there are fewer used cars up to four years old to go around. September should see a spike in their numbers but an equal spike in demand.
Benefits of buying used
You save money. Cars are typically worth around 40% of their new price at three years and many a lot less although, you must add the dealer's overheads, profit margin and VAT to arrive at the retail price you actually pay.
Early faults have been ironed out. The increase in electronics and software in cars has seen an almost equal increase in teething problems and issues. Many will have been resolved with over-the-air or dealer software updates, meaning used cars that have benefited from them are less likely to give trouble than some new ones.
You can buy some of the last petrol or diesel cars. With 2035 approaching, when new petrol and diesel cars can no longer be sold (the government may bring the ban forward to 2030), now may be your last chance to buy that nearly new or low-mileage petrol or diesel car before it's no longer available. Car makers are phasing them out in favour of hybrids and electric cars but not everyone wants or can afford them. Buy the best and buy right and a good used petrol or diesel could well be your 'forever car'.
You have the satisfaction of beating the system. It's not often you can buy the same thing for thousands of pounds less than your neighbour but buying a used car, you can. It may not be the latest version but who cares when you've saved this much money?
Those are the benefits of buying new or buying used. However, no matter how well bought a car is, things can happen to it that reduce its value and hit your pocket hard. Here's how to protect your investment:
Maintain the car's service history
It's obvious, really, but having your car regularly serviced keeps you safe, keeps it running efficiently, reduces the risk of break downs and expensive repairs and boosts its resale value. It doesn't have to be that expensive, either. Under the law, independent garages have the same access to vehicle data and information as main dealers and, assuming they use approved parts, can service and repair cars without affecting their warranty. There are thousands of such garages, most of which abide to strict codes of practice. Meanwhile, MotorEasy offers reduced-price servicing through its network of trusted garages.
Get it covered for cosmetic and alloy repairs, and tyre repair and replacement
Dings, dents, scrapes and punctures happen to cars all the time. Not only are repairs expensive – roughly £80 to repair a couple of dents per panel, £100 to repair a kerbed wheel, £150 for a new quality tyre and hundreds of pounds to respray and blend-in a deep paint scratch – but if you ignore them, they reduce the value of your car. There are plenty of repair firms who can do the work but what you'll have to pay them you're unlikely to have budgeted for.
Fortunately, just as it's possible to insure your car, you can also insure it against the cost of unexpected body and wheel repairs, and tyre repairs and replacements. You pay a monthly sum and whatever happens – and it will – you can rest easy knowing it won't be the disaster it might have been. There are a few such policies on the market including those offered by MotorEasy for cosmetic repairs, alloy wheel repairs and tyres.
Mind the GAP
As we've said, cars depreciate heavily. If that isn't bad enough, in the event your car is declared a total loss, depending on the insurance policy you have and how old your car is, the amount of money your insurer is likely to give you for it is likely to be a lot less than what it cost you, leaving you out of pocket.
In this situation, Gap insurance – the letters stand for guaranteed asset protection – can help. Its aim is to bridge the gap between your insurance payout and your vehicle's purchase price or outstanding finance. There are different types of Gap insurance offering different levels of cover and it pays to understand them. MotorEasy offers a guide to the different types of Gap insurance and can offer you Gap insurance to suit you.
Safeguard with a warranty
While cars have become more reliable over the years, they’ve also become increasingly complex. Electronics and computerised components have swept through every conceivable quarter, from engines and drivetrains, to cabins and in-car entertainment systems. Gone are the days when a nation of amateur mechanics could repair any fault with a trusty Haynes manual and a knowing glint in the eye. The fact is, when things go wrong repairs can be expensive, even for basic items like headlights or door handles.
So, if your car is three years or older and its manufacturer warranty has expired, a used car warranty is a great way to buy peace of mind. Check out MotorEasy’s warranty guide before you buy.
