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Car finance ›
Should I buy a new or used car?
Updated: Thursday, 14 March 2024
When it’s time to upgrade your car, the choice between buying a new or used car can be difficult. There are many things to consider, including car type, price, make, model, and whether you buy it outright or get car finance.
In this guide, we explore the car buying process and the pros and cons of buying a new or used car. That way, you can choose the right option.
In this guide
Buying a brand-new car
Getting a brand-new car means you’ll get the latest safety features and can configure the vehicle to your needs. You’ll also get the full manufacturer warranty, so if something goes wrong, you should be covered.
Here’s what happens if you decide to buy a brand-new car:
When it’s time to upgrade your car, the choice between buying a new or used car can be difficult. There are many things to consider, including car type, price, make, model, and whether you buy it outright or get car finance.
In this guide, we explore the car buying process and the pros and cons of buying a new or used car. That way, you can choose the right option.
In this guide
Buying a brand-new car
Getting a brand-new car means you’ll get the latest safety features and can configure the vehicle to your needs. You’ll also get the full manufacturer warranty, so if something goes wrong, you should be covered.
Here’s what happens if you decide to buy a brand-new car:
Shopping around
After browsing cars available in your price range, you can visit a dealership to see some vehicles, learn more about the finance options available, and take a test drive (if you find one you like).
If you plan to part exchange your current car, you can get it valued by the dealership at the same time. This will give you an idea of how much it will cost to upgrade if you decide that’s right for you.
Shopping around
After browsing cars available in your price range, you can visit a dealership to see some vehicles, learn more about the finance options available, and take a test drive (if you find one you like).
If you plan to part exchange your current car, you can get it valued by the dealership at the same time. This will give you an idea of how much it will cost to upgrade if you decide that’s right for you.
Exploring payment options
Once you’ve found the right car and gone for a test drive, it’s time to decide how you’ll pay for it. You could choose to buy the car outright, but this means you’ll have to pay a lump sum upfront. This could be if you have enough in savings, or get a personal loan from a bank.
You could also choose to finance your next car, through a Conditional Sale (CS) or Personal Contract Purchase (PCP) agreement.
Explore the different types of car finance in our guide, ‘How does financing a car work?‘.
Exploring payment options
Once you’ve found the right car and gone for a test drive, it’s time to decide how you’ll pay for it. You could choose to buy the car outright, but this means you’ll have to pay a lump sum upfront. This could be if you have enough in savings, or get a personal loan from a bank.
You could also choose to finance your next car, through a Conditional Sale (CS) or Personal Contract Purchase (PCP) agreement.
Explore the different types of car finance in our guide, ‘How does financing a car work?‘.
Collecting the car
Once payment is finalised, you’ll need to sort out the paperwork, as well as your part exchange if you wish to do that. When handing over your old vehicle, you should also give the car’s vehicle logbook (V5C) to the dealership. This allows them to update the car’s registration.
After doing this, the dealership will tell you when you can pick up your new car!
Collecting the car
Once payment is finalised, you’ll need to sort out the paperwork, as well as your part exchange if you wish to do that. When handing over your old vehicle, you should also give the car’s vehicle logbook (V5C) to the dealership. This allows them to update the car’s registration.
After doing this, the dealership will tell you when you can pick up your new car!
What are the benefits of buying a new car?
- You get the latest technology and safety features
- You’ll get the full manufacturer’s warranty
- The first three years are MOT-free as explained on GOV.UK
- There’s no unknown history around the car like when you buy a used car
What are the risks of buying a new car?
- New cars are more expensive than used ones
- New cars may depreciate quickly, especially in their first year
- You may have to wait for the car to be made and delivered
- Insurance premiums can be higher
What are the benefits of buying a new car?
- You get the latest technology and safety features
- You’ll get the full manufacturer’s warranty
- The first three years are MOT-free as explained on GOV.UK
- There’s no unknown history around the car like when you buy a used car
What are the risks of buying a new car?
- New cars are more expensive than used ones
- New cars may depreciate quickly, especially in their first year
- You may have to wait for the car to be made and delivered
- Insurance premiums can be higher
Buying a used car
Buying used is much cheaper than buying new, but you’ll need to do more research to make sure it suits your needs. For example, you’ll need to check its MOT and service records to get an idea of the car’s history.
Buying a used car
Buying used is much cheaper than buying new, but you’ll need to do more research to make sure it suits your needs. For example, you’ll need to check its MOT and service records to get an idea of the car’s history.
Shopping around
When looking for a used car, you’ll have a wide selection to choose from, including those sold through dealerships and private sales. If you find a car at a dealership, you can check online reviews to ensure you buy from a reputable place.
If you find a car being sold privately, you can use the car’s registration number to conduct an HPI check. This will tell you whether the vehicle has a hidden history, e.g. if it has been reported as stolen, has outstanding finance, or has been recorded as scrapped.
If you’re considering buying a second-hand car, check out our ‘What to check when buying a used car‘ guide so you know the things to look out for.
Shopping around
When looking for a used car, you’ll have a wide selection to choose from, including those sold through dealerships and private sales. If you find a car at a dealership, you can check online reviews to ensure you buy from a reputable place.
If you find a car being sold privately, you can use the car’s registration number to conduct an HPI check. This will tell you whether the vehicle has a hidden history, e.g. if it has been reported as stolen, has outstanding finance, or has been recorded as scrapped.
If you’re considering buying a second-hand car, check out our ‘What to check when buying a used car‘ guide so you know the things to look out for.
Inspecting the car
When you’re ready, you can arrange a visit to inspect and test drive the car. Inspecting a car during the day makes it easier to spot any damage or wear and tear.
When testing the car, there are various checks you can make to ensure it is a reliable car that suits your needs. Read our full guide on how to test drive a car to learn more.
Inspecting the car
When you’re ready, you can arrange a visit to inspect and test drive the car. Inspecting a car during the day makes it easier to spot any damage or wear and tear.
When testing the car, there are various checks you can make to ensure it is a reliable car that suits your needs. Read our full guide on how to test drive a car to learn more.
Negotiating a deal
One of the benefits of buying a used car is that you might be able to negotiate its price. If you spot a part that needs replacing soon, or wear and tear, you may be able to negotiate the price.
Negotiating a deal
One of the benefits of buying a used car is that you might be able to negotiate its price. If you spot a part that needs replacing soon, or wear and tear, you may be able to negotiate the price.
Paying for the car
When buying a used car, you may need help accessing finance options. Read more about this in our ‘Can you get car finance for a private sale?‘ guide.
Other options for buying a used car include:
- Cash: you would need to have all the money upfront, which can be a lot depending on the car you’ve chosen.
- Debit card or bank transfer: paying via bank transfer can be more convenient than paying with cash, and using a debit card may offer a level of protection if something goes wrong.
- Credit card: most dealerships don’t accept credit cards, but if you can and choose to pay this way, you’ll benefit from payment protection (this is known as Section 75 protection).
- Personal loan: this lets you spread the cost of a car over an agreed time. If you get a car loan, this will be secured against the vehicle, and it could be repossessed if you fail to keep up with the repayments.
Read our full guide on secured vs unsecured car loans for more information.
Paying for the car
When buying a used car, you may need help accessing finance options. Read more about this in our ‘Can you get car finance for a private sale?‘ guide.
Other options for buying a used car include:
- Cash: you would need to have all the money upfront, which can be a lot depending on the car you’ve chosen.
- Debit card or bank transfer: paying via bank transfer can be more convenient than paying with cash, and using a debit card may offer a level of protection if something goes wrong.
- Credit card: most dealerships don’t accept credit cards, but if you can and choose to pay this way, you’ll benefit from payment protection (this is known as Section 75 protection).
- Personal loan: this lets you spread the cost of a car over an agreed time. If you get a car loan, this will be secured against the vehicle, and it could be repossessed if you fail to keep up with the repayments.
Read our full guide on secured vs unsecured car loans for more information.
What are the benefits of buying used?
- Used cars are cheaper than brand-new models
- Car insurance is usually much cheaper
- There’s a wider variety of cars to choose from
- Road tax may be lower
What are the risks of buying a used car?
- Buying from private sellers can have less protection than from a dealership
- Little or no warranty is available if something goes wrong
- An old car may have underlying issues or an uncertain history
- There are more things to watch out for when buying a used car compared to buying new
What are the benefits of buying used?
- Used cars are cheaper than brand-new models
- Car insurance is usually much cheaper
- There’s a wider variety of cars to choose from
- Road tax may be lower
What are the risks of buying a used car?
- Buying from private sellers can have less protection than from a dealership
- Little or no warranty is available if something goes wrong
- An old car may have underlying issues or an uncertain history
- There are more things to watch out for when buying a used car compared to buying new
Should you buy a new or used car?
Whether you buy a new or used car typically comes down to your budget. Buying a brand-new or nearly new car will cost much more than one that’s older and used. If you’re looking for luxury and technology, then you might want something brand-new or within the past couple of years. If you are looking for something more cost-effective, used is a popular choice.
Is car insurance cheaper on new or used cars?
Car insurance is usually cheaper on used cars as they are less valuable than brand-new ones. Other factors will still affect how much you pay for insurance, though, including your driving history, the level of coverage you choose, and any policy add-ons you want.
What are nearly new cars?
Nearly new cars are usually less than 12 months old and have less than 10,000 miles on the clock. Other cars that are considered ‘nearly new’ may have been bought and registered by a dealership to ensure they can meet sales targets set by manufacturers.
Nearly new cars fall in the middle of new and used cars, meaning they have the following benefits:
- The car has usually been through the worst of its depreciation, meaning it is heavily discounted from its price as a new car
- A portion of the manufacturer’s warranty may remain
By contrast, there are some pitfalls to nearly new cars, such as:
- New cars have a full warranty
- They won’t be completely new, so there may be wear and tear or damage
Can you get car finance on used cars?
If you choose to buy a used or nearly new car through a dealership, you can access different types of car finance. We’ve created a guide, ‘is car finance worth it?‘, which takes a closer look at the pros and cons of car finance to help you decide whether this is the best option for you.
At Moneybarn, we offer Conditional Sale agreements on new and used cars, vans, and motorbikes as long as they’re bought from a reputable dealership. Our friendly Direct Sales team can help you find the right vehicle for you, or you can take a look at our guide ‘how to decide what car to buy‘ to understand what you should consider before buying a new car’
Take your first step to securing a new or used car by seeing what your agreement could look like with our car finance calculator. Once you’re ready, get a quote – it takes less than 5 minutes, and we only use a soft search at the point of application.
Representative 30.7% APR.
Should you buy a new or used car?
Whether you buy a new or used car typically comes down to your budget. Buying a brand-new or nearly new car will cost much more than one that’s older and used. If you’re looking for luxury and technology, then you might want something brand-new or within the past couple of years. If you are looking for something more cost-effective, used is a popular choice.
Is car insurance cheaper on new or used cars?
Car insurance is usually cheaper on used cars as they are less valuable than brand-new ones. Other factors will still affect how much you pay for insurance, though, including your driving history, the level of coverage you choose, and any policy add-ons you want.
What are nearly new cars?
Nearly new cars are usually less than 12 months old and have less than 10,000 miles on the clock. Other cars that are considered ‘nearly new’ may have been bought and registered by a dealership to ensure they can meet sales targets set by manufacturers.
Nearly new cars fall in the middle of new and used cars, meaning they have the following benefits:
- The car has usually been through the worst of its depreciation, meaning it is heavily discounted from its price as a new car
- A portion of the manufacturer’s warranty may remain
By contrast, there are some pitfalls to nearly new cars, such as:
- New cars have a full warranty
- They won’t be completely new, so there may be wear and tear or damage
Can you get car finance on used cars?
If you choose to buy a used or nearly new car through a dealership, you can access different types of car finance. We’ve created a guide, ‘is car finance worth it?‘, which takes a closer look at the pros and cons of car finance to help you decide whether this is the best option for you.
At Moneybarn, we offer Conditional Sale agreements on new and used cars, vans, and motorbikes as long as they’re bought from a reputable dealership. Our friendly Direct Sales team can help you find the right vehicle for you, or you can take a look at our guide ‘how to decide what car to buy‘ to understand what you should consider before buying a new car’
Take your first step to securing a new or used car by seeing what your agreement could look like with our car finance calculator. Once you’re ready, get a quote – it takes less than 5 minutes, and we only use a soft search at the point of application.
Representative 30.7% APR.
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
