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When buying brand new makes more economic sense

With car dealers all chasing the same kind of stock at present prices are remaining high and bargains are hard to come by. That’s not the same if you are buying new or nearly new where it has to be said there is definitely some tremendous value. In addition, if you are shopping on a monthly payment, some of the manufacturer’s incentives are well worth checking out.

Car makers themselves are some of the few voices in the sector that believe there will be growth in new car sales this year and having made bullish statements will clearly feel the need to try and incentivise customers as best they can to make these predictions credible -are we talking about a self (registration) fulfilling prophecy here?

Anyway, what we tend to see when this sort of thing happens is that often a new car, when all things are considered, can be cheaper than a used one. This may seem crazy to the uninitiated and probably does seem a bit bonkers to a few of the initiated too.

As an example, if there is an offer of 0% finance, free car insurance and 3 years free servicing on a new car this can be worth in “value add” as much as £2,500 on some cars and if there is a target month payment to achieve it will often be the case that buying new makes much more sense.

If a customer is considering a car change over the next few weeks they will be well advised to carefully weigh up all the options before committing to a choice as there are likely to be some pretty persuasive arguments either way.

On the other hand, if there is a fairly fixed cash budget things become a little harder and ironically there appears to be less value on the market at present. People seem to be holding onto their existing cars for longer and therefore higher mileage models are in abundance. This, of course, tends to put many buyers off, when really if they are a low mileage user – particularly if they do 5k or under – there can be some real value to be had in paying less for a higher mileage car and not significantly adding to the mileage over the next few years. As a result they are allowing the year to catch up with mileage and the owner will be losing much less in depreciation to boot.

Although many in the trade are happy at present and there appears to be some good footfall it is certainly not the buying frenzy of a few years ago. This means there is a high likelihood of some extensive “tactical activity” for the foreseeable future which should be make buying certain cars a worthwhile investment.

Feb 28, 2012In51der
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