If you're one of many who have set aside a lump sum of money to buy a new car but you're wondering whether to buy a smaller new car or a larger used car, here's a short guide into what's available to you on the used car market. All new cars depreciate in value the moment they leave the forecourt and sometimes it's better value to spend 7,000 on a used vehicle than spending it on a new one.
New cars obviously come with warranties and perhaps other benefits such as time limited free petrol or servicing but buying a car which is a few years old means that most of the depreciation has already happen and you get a better car than you would if it was new.
If you have around 7,000 to spend you can get your hands on cars such as the popular Fiat 500 or the larger Alfa Romeo MiTo. The steep drop in price means that both cars have deprecated a lot but they are both great rides. In comparison the Mini Cooper retains its value better and for the same investment you would have to go back five years. Its retro styling is still the current one which means it should keep holding its value well as it won't date.
If you're looking to get a larger used vehicle you would also have to look at models which are between 5 and 7 years old if your budget it around 7,000. This however will get you something like a used Mercedes-Benz or a used Jaguar. The 2000 Mercedes C-Class for instance was engineered for high mileage usage which means that even a 6 year old model will have plenty of life left in it. Similarly you could also opt for a 5 year old Jaguar S-type, another vehicle built for high mileage.
If you compare the above with what you could get new, a Volkswagen Fox would cost 7,500 new and be worth almost 3,000 less after 12 months while the above mentioned Mini would cost you around 20,000 new so waiting five or six years for the prices to come down might just be worth it. Both these cars are rated as cars which depreciate the least as most small cars tend to hold their value well. Larger more luxurious vehicles on the other hand can deprecate as much as 50% in the first year.
So if you have a limited budget and are wondering whether it's worth using it on a brand new car, the answer might just be 'no'. You will probably get more for your money if you look at used cars.
Author Resource:-
Marianne is currently researching the autmotive industry and is interested in cars.
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