Following on from my post about how to minimise your motoring costs, I read an article from a US blogger where for him buying a brand new car for cash worked out better than a used one.
Using the same information as before, assuming 10,000 miles pa, I ran the numbers to see if the same situation would apply in the UK.
While there is indeed a reduction in motoring expenses by buying new rather than leasing, it is still more expensive than running a second-hand car from 3 to 9 years old.
In the table below I’ve used the same car, a Yaris Hybrid. While the new price is listed at £17000, you can pick one up through a broker for just over £15,000.
The fact that the second-hand values drop quite a bit makes purchasing a 3-year-old car better, however it is a calculation that you should run for yourself depending on which model of car you are looking at.
A 3-year-old car at £8,000 is significantly less than the discounted new price of £15,000.
For the example, I’ve assumed that the brand new car will be worth £4000 as a trade in at the end of 6 years.
|10,000 miles pa||New Car for cash||3 Years Old|