Brand new or nearly new?

We can’t deny that a brand new car has its strong points. You get to personalise the car to suit you, adding as many optional extras as you like; you won’t have to worry about service history or not being covered by a warranty; and don’t forget about that new car smell.

But did you know that as soon as you drive out of the showroom, your new car loses an average of 20% in value1? And by its 1st birthday, the value of the car will have decreased by approximately 40%2.

So, what about buying a ‘nearly new’ car?

With a ‘nearly new’ car, you can expect it to be less than 1 year old and have less than 5,000 miles3. You’ll find that these types of cars are typically used for demonstrations and test drives by the dealer. So you can expect these cars to be looked after.

You could save a lot of money buying a ‘nearly new’ car because the dealer is the first owner, meaning the dealer has already taken the 20% showroom loss. And with the car being less than a year old, you’re likely to enjoy many of the benefits a brand new car offers4. Win, win.

Here are some other reasons you should consider buying a ‘nearly new’ car

Here are some other reasons you should consider buying a ‘nearly new’ car

  • Expect a 5-25% reduction from the original price - dependent on the make and model of the car5
  • Save on MOT costs as the car will be less than 3 years old6
  • Covered by the standard manufacturer warranty – subject to the car registration date and date of buying the car
  • Your car will already be built so you’ll sidestep the long wait for a brand new car

What should I keep in mind?

What should I keep in mind?

Although the benefits of buying a ‘nearly new’ car appear to be a no brainer, it’s good to keep in mind some of the downsides.

  • As the car will already be built, you may be limited in choice when it comes to choosing the colour, car’s specification, and optional extras. But as the dealer normally chooses these to match what the car buying market wants, you may not necessarily lose out7
  • Given that the majority of headline deals for car finance typically apply to brand new cars, you may not get the best ‘nearly new’ car deal from the dealer7. But keep in mind that  dealerships aren’t the only car finance provider and you could find better deals elsewhere
  • Lastly, as mentioned before, you will be the second registered owner of the car which might influence the car’s resale value1

Thought about buying ‘used’?

Thought about buying ‘used’?

In the interest of talking through alternative car buying options, let’s not forget about ‘used car’ buying. Here are some of the benefits:

  • You won’t be short of car choice with approximately 8 million used cars sold each year8
  • You avoid the showroom depreciation loss2
  • To give you that extra peace of mind, some dealerships extend the original manufacturer’s warranty so you don’t lose out9
  • Some dealerships offer an ‘approved used scheme’, selecting the best used cars for customers. This means passing their service history and mechanical checks
  • Don’t forget that you could get a better deal when you buy privately, but just keep in mind that you may not have the same amount of protection as with buying with a dealer nor the flexibility in how you finance the car1

Want to learn more? Find out more on buying ‘used’ in our helpful guides.

So there you have it, you could enjoy the benefits of a brand new car whilst saving money buying ‘nearly new’, or you also have the option to make bigger savings buying ’used’. It’s a buyers’ market, so just remember to stick to your budget and criteria and get your negotiating hat on. For hints and tips on how to negotiate, check out our 10 Golden Rules.

Learn more about Car Finance options

Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.