The Big Car Dilemma: Spend or Save?

When it comes to choosing your new car, you will find yourself confronted with an age-old question:

“Should I buy a brand new car, or opt for a cheaper used car?”

There are many different factors that go into answering this question. Let’s dive into the details so you can decide which is right for you, exploring the key questions around this dilemma, and providing you with the answers you need to make the right decision for your next purchase.

“Why would anyone buy a used car if they can afford a new one?”

This is a valid question; after all, if you can buy a new car, why wouldn’t you? New cars are… well, they’re new; they’re yours, you know the history, and they’re never going to work better than they do right off the assembly line.

However, there are downsides to choosing a new car, some of which you might not have considered before:

Very few people can buy a new car for cash. The vast majority of new cars are bought using some form of financing. Credit cards and personal loans are often used to fund a new car purchase, but by far the most common financing option is a car loan. Car loans might be able to get you on the road in the vehicle of your choice, but they also tend to be incredibly expensive, with huge APRs and worryingly high repayments. Furthermore, there are even signs that the car loan industry is in trouble, with a bubble not dissimilar to the subprime housing market of 2008/09– the housing market that then crashed, taking much of the global economy with it.

Given how worryingly precarious the car loan market is, steering clear of it (if you’ll excuse the pun) might be a better idea than you think.

“What if I can get a good deal?”

If you can find a good financing deal, and you’re confident you’ll always be able to make the repayments, then you don’t need to worry quite as much. However, there are additional reasons a new car might not be for you.

“Such as…?”

The biggest concern with new cars is their depreciation value. Cars depreciate at a truly horrendous pace, meaning that you could find yourself paying an inflated purchase price (which you then have to keep paying for the duration of your finance agreement) and then having very little to show for it.

If you buy a second-hand car, then the initial high purchase price has already been paid by someone else– and you are able to take advantage of that depreciation as a buyer, rather than losing out as a seller.

“Is buying a second-hand car safe?”

Of course, some second-hand cars are not safe– we’ve all seen the news reports about disreputable car salesmen and bad workmanship. Some of the stories are truly terrifying. Badly-repaired second-hand cars that effectively crumple if another driver accidentally rear ends you, meaning that you have to go through the hassle of a repair and following this link to investigate compensation opportunities. Or you may have heard scare stories about wheels falling off, engines malfunctioning, or second-hand buyers being left with huge repair bills after only a few days usage.

As worrying as these stories are, you can avoid them by ensuring you always buy a second-hand car from a reputable dealer. While buying from a member of the public may be cheap, there’s a far higher chance that you won’t be getting the quality car you think you’re paying for. If you always buy from a reputable dealer, then yes, it’s safe to assume that second-hand cars are safe– though you’ll still want to do all the relevant safety checks, of course.

“Do second-hand cars cost more to run than new cars?”

This is a common concern, and the answer is… it depends. It depends entirely on the quality of the second-hand car that you buy, how good the maintenance has been, and how good a deal you get on financing.

However, it’s worth remembering that while you may have to pay for more repairs on a second-hand car, that doesn’t necessarily mean it will be more expensive to run than a new car. The price difference for repairs is offset by the higher purchase price for a new car, so make sure you factor that into any calculations you’re doing.

“What are the major pros and cons of each option?”

New Car: Pros

  • The car is in great condition.
  • Will be up-to-date regarding technology and performance.
  • Higher resale value (even with depreciation factored in)

New Car: Cons

  • Depreciation is a real concern.
  • Maybe overpriced, with dealers cashing in on the “new” novelty factor.
  • More expensive upfront costs.

Second-Hand Car: Pros

  • Lower cost to purchase.
  • You can benefit from the depreciation of the cost of the car from the “new” cost.
  • Your insurance rates may be lower on a used car than a new one, though this does depend on the model and driving background.

Second Hand Car: Cons

  • Potential safety concerns (though these can be reduced by buying from a reputable source)
  • The car might not feel like “yours” in the same way a new car will
  • You can’t always know the car’s exact history.

“Which is right for me?”

Ultimately, you have to make this decision based on:


  • Your financial situation. What can you afford? What financing options are available to you? Do you have enough money to afford repairs, or do you need to be able to rely on a warranty?
  • Your requirements. Do you have special requirements for your car, such as adaptations? If so, it may be easier to find a suitable new car that can be tailored to your needs.
  • Your preferences. Do you like the idea of a new car? Does the idea of a second-hand car make you uncomfortable?
  • Your plans. How long are you going to keep the car for? Does the resale value matter to you? If the car hugely depreciates, are you still going to see a new car as a good investment?


When you have perused the information above and can answer the final section of questions, you’ll be well equipped to make the right decision for your next vehicle purchase.