Do I want to buy a new car or a used car? And what’s the difference?

DECIDING whether to buy new or used is the first decision you will need to make when it comes to finding the perfect car for you.

Obviously budget is a significant factor, but there are other issues to take into account. Long-term ownership costs, dealer support, payment plans and special offers should all be taken into consideration.

It can get confusing, but our quick “New or Used?” guide will help you decide which motor suits you.

WHY BUY A NEW CAR?

Manufacturers are desperate to attract new-car buyers and will offer all sorts of special deals and incentives to encourage them to drive a shiny motor off the forecourt.

Some of these are gimmicks (nobody is going to buy a new car simply because the dealer says he will throw in a pair of rubber floor mats) but some, such as free roadside recovery, can really start to add up over the years.

IN WITH THE DEAL

Car makers are increasingly offering packages in which you pay a fixed amount for routine service work at their franchises for, say, the first three years. This protects you against price rises, and packages are usually transferable to subsequent owners, improving the car’s appeal should you choose to sell it later.

Work out the value of other extras such as free breakdown cover and roadside assistance, and whether they provide the level of support you need.

If you are buying your car on finance, look for incentives such as 0% APR or a deposit contribution.

LOWER RUNNING COSTS

New cars are invariably more efficient and buying the latest model could save you pounds at the pumps. Lower carbon dioxide emissions mean lower tax bands, and having the latest safety and security equipment could lower the cost of your insurance.

WARRANTIES

A new-car warranty can prove very valuable. This will cover you for mechanical faults, manufacturing defects and breakdowns but not for wear and tear to ‘consumable items’ such as brake pads and tyres. It also won’t cover damage caused by your driving style or an accident.

Mileage limits are usually applied to cover and there may be different limits for different parts of the car ‒ say, three years for its audio system and 10 years’ cover against corrosion.

Check terms and conditions carefully for anything that may invalidate your warranty, such as using the car for track days or as a taxi, or carrying out modifications.

Under EU law you do not have to have your car serviced by franchised dealers to maintain the manufacturer’s warranty but in the event of a claim you will have to prove that the garage you used worked to a comparable standard and used comparable parts ‒ which may be disputed.

THINK LONG TERM

Depreciation (loss in value) is the single largest cost in running a new car.

The effect is steepest in the car’s first 18 months or so, slowing down after two or three years but never going away.

If you’re planning to keep your car 10 years then buying a new car begins to make sense since you will not experience waves of successive new-car depreciation. If you’re likely to want to change it regularly, then you should always choose the most in-demand versions to minimise its impact.

One of the delights of buying a new car is choosing exactly the equipment and trim you want ‒ why put up with someone else’s taste?

Beware, though: some options are worth more than others. For example, parking sensors on large MPVs are a wise investment but options such as panoramic glass roofs cost a fortune new but do little to stem depreciation.

Some options are vehicle-type specific. A factory-fitted towbar adds to the value of a used 4×4 but reduces the value of an estate or hatchback because buyers worry the car has been placed under extra strain from towing heavy trailers.

WHY BUY A USED CAR?

You don’t have to be a cheapskate ‒ or skint ‒ to see the advantages in buying a second-hand car.

Even if it’s nearly new, someone else has already borne the brunt of its depreciation and any teething troubles should have been rooted out. With many more places to buy used than new, there’s more scope for shopping around and bargaining.

Work out your budget, do your research on prices and check out our used car reviews to find out what common faults and problems to look out for in the models you’re considering.

THE RISK FACTOR

Cars are much better built and more resistant to corrosion than they were 15 years ago, and tighter regulation has reduced the number of write-offs and stolen cars making their way back onto forecourts.

There are still risks, of course, but a simple data check will reveal whether a car has been registered as an insurance write-off, whether it has been stolen and whether a previous owner still owes money on it.

Data checks are available online. Perhaps the best-known provider is HPI //www.hpichceck.com/ which is used by motoring organisations including the AA and the RAC.

A nearly new car will still have the remainder of its original warranty (which could cover it for up to seven years, depending on the brand) though some aspects may apply to the first owner only.

Cars sold through a main dealer, a manufacturer’s “approved used” scheme or a large-scale independent retailer will probably be sold with a long checklist of components and functions that have been passed as sound.