When it’s time to buy a car what’s your usual process? We all have a process. Some of us go to a car dealer looking for the family car of dreams while some of us pop over to sites like Gumtree in search of a runner to take us from point A to point B. While our approaches may be different what we certainly all have in common is the need to get the best deal within our budget. Before we decide what colour of car we want or the size of our engine the question we ask ourselves when buying a car is “is new really better than old?”
I suppose it all depends on many factors – your budget, whether this is your main car or not, how much you’re willing to spend on maintenance, etc. Another big thing to consider is car insurance. Increasingly, choosing the right type of insurance for you has become an important factor in buying a car. We’ve all heard how insurance average insurance premiums have risen over the last few years and we all know about the unacceptable risks of driving without insurance.
With so many options on the market, what exactly do you need to think about when you’re deciding what cover to go for?
Car Insurance – Should New or Used Matter?
There’s no guarantee that buying a used car will mean you’ll pay less for your insurance. There are a variety of factors that determine the cost of car insurance, including the type of car you buy, what type of cover you want, your driving experience, and the area where you live. The actual age of the vehicle is a factor, but it is a small one.
As I said earlier, the car insurance market is awash with options. So, it’s important to do your research and these days there are plenty of tools available to make sure that you make the right decision. My own policy is due for renewal soon and I’ve just been checking out Aviva’s comprehensive and third-party insurance options. Here’s what they offer.
Comprehensive vs Third-Party
What’s covered in a Comprehensive Policy
- Loss or damage to your vehicle
Cover if your vehicle is lost, stolen or damaged - Your liability
Cover if you injure someone or damage their vehicle or property in an accident - Uninsured driver cover
If you’re in an accident with an uninsured driver that wasn’t your fault 2 - Vehicle recovery
We’ll make your vehicle roadworthy with roadside repairs, or cover up to £150 for accommodation or public transport - Driving other cars
Cover for driving someone else’s car (if you’re aged 25 or over) 3 - Legal costs
Cover for legal costs if you’re involved in an accident - Motor injury protection
Cover for you, your partner and named drivers for death or serious injury after a motor accident - Individual no claim discount
Earn a no claims discount on each vehicle you insure
What’s covered in a Third-Party Policy
- Damage to your vehicle
Cover against loss or damage to your car due to fire, theft or attempted theft - Vehicle recovery
Protection and removal of your vehicle if damaged by fire, theft or attempted theft - Legal costs
Cover for legal costs if you’re involved in an accident
Another great benefit is that you can add optional add-ons to create a policy that completely fits your needs!
Buying New
The Pros to Buying a New Car
When you opt for a new car the biggest advantage that you’ll have is the warranty. New cars have a warranty that can offer cover for a set number of years or a set number of miles, whichever comes first. Since new cars usually won’t require any work other than maintenance for the first few years it can be more convenient and offer less hassle than buying used.
On top of that, you’ll be getting the best of the best in terms of safety features and technology. From integrated SatNav to a more eco-conscious experience, if you’re keen to enjoy the best that money can buy then a new car may be for you.
The Cons to Buying a New Car
Wait? What? There are cons to buying a new car? Absolutely! The first and the biggest con is depreciation. They say that as soon as you drive your car it will have gone down in value by the thousands. The way depreciation works is not usually widely understood but once you are aware it is a concept to always consider. It simple really. If you add the finance charges to the price of the car you’ll eventually end up owing more on your car than it’s worth.
Overall when buying a new car you’ll end up spending a lot more money. Not only when it comes to interest if you’re getting a loan to pay for it, but also due to the higher sale price.
Buying Used
The Pros to Buying a Used Car
The advantages of buying a used car, for me, are many. If you buy used you’ll be able to save yourself from the depreciation hit, for starters. Which means that if you want to sell in the future you’ll most likely be able to get back what you spent on the car, or close to it.
The Cons to Buying a Used Car
The biggest con is knowing that you’ll be investing money in keeping the car roadworthy throughout the time you own it. That can end up being pricey, especially as those type of expenses seem to come at us quite unexpectedly. Maintenance may be a bit more expensive as well and even though you will be paying less outright its important to consider your monthly budget. The last thing you want is to go into debt or to not pay your utility bills for the sake of fixing your car.
Choosing the right car, whether it’s new or used, is an important issue that you want to make sure you get right. There’s no single recipe for success, but I hope I’ve edged you closer to your final decision.
