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With the new 15 series registration plates released on March 1 2015, you may be considering upgrading your car. And you’re not the only one – recent research shows that January car sales this year were at their highest level since 2007. Nearly 165,000 new vehicles were registered throughout the month in total, 10,000 more than January 2013. People are increasingly turning to brand new cars bought on three year finance deals, with white now being the most popular colour of choice.

The 15 registration plates may only apply to new vehicles, but before you start looking for your next car, you might also want to think about saving money by buying an older model. We’ve taken a look at the pros and cons of buying new and buying second-hand:

The pros of buying a new car…

Though you may think the biggest drawback to a new car is the price (more on that later), you may actually be more likely to get a discount if you try to haggle than you would on a second-hand car. When you pay for your car, you can also manage the cost by buying on finance. So, even if it’s more expensive, you won’t have to cover the full amount in one go. Make sure though that you’ll be able to afford the monthly repayments, as it will affect your credit score if you miss any, meaning you could struggle to apply for a loan, credit card, or mortgage in the future.

Another benefit to buying a new car is that it might come bundled with anything from a one year to a seven year full warranty, meaning if anything goes wrong in that time, the manufacturer will deal with it. The dealer may also throw in other extras, such as extending the warranty further, free servicing, or breakdown cover and in some cases free insurance or fuel for a set period. Just make sure that the ‘freebies’ aren’t the reason you’re buying the car; they are just a bonus!

New cars are also often more fuel-efficient, so they’ll cost you less in petrol to run. They’re often safer than old cars – with features such as airbags and anti-lock brakes – meaning that if you have an accident, it’s may be less likely to be serious than it would be in a clapped-out banger. The technology in newer cars is less likely to go out of date in the next few years too, so if your clutch goes after you’ve owned your car for a while, you shouldn’t struggle to get it fixed.

…and what to be aware of

The biggest downside to buying a car brand-new off the forecourt is an obvious one: it’s going to cost you more. What’s worse, it will start to lose value almost immediately. One statistic that’s often cited, is that a new car will depreciate 20% in value the minute you drive it out of the showroom. For that reason, you need to be sure that you definitely want it and it’s suitable for your needs, as it might not be worth selling for the first couple of years that you own it.

Whilst new cars shouldn’t have anything seriously wrong with them like old bangers might, they could sometimes have ‘teething problems’ – small mechanical issues with the way they run, especially if it’s got a new technical feature that wasn’t in previous models. Buying a second-hand or nearly new car can eliminate this, as these issues usually work themselves out in the first 1,000 miles or so. If you’ve bought a new car, you might have to take it in to the garage to get these problems fixed. Though most common problems are likely to be covered by the warranty, it could still be an inconvenience for you to have to go into the garage to get little niggles sorted out. If you decide to go for a new car, read through this helpful AA guide on how you should take care of it for the first 1,000 miles.

The pros of buying a second-hand car

Buying a second-hand car will almost certainly be cheaper than if you were to buy a new model, even if it’s only a few months old. You could also save on the cost of insurance, as it will cost less for insurers to replace a cheaper car if you have an accident than it would if it was a brand-new model. However, this rule only applies up to a point – if you buy a car that’s more than 10 years old, it could actually be more expensive to insure, as your insurance provider may think that you’ll see it as more expendable and won’t drive as carefully.

If the car you buy is nearly new, it will be likely to have many of the fuel-efficiency and safety features that new vehicles have, so there might be no difference to brand-new cars in that respect. It’s also easier to buy second-hand cars, as they’re on sale in more garages and from more dealers, so you may get a wider choice when you’re choosing your vehicle.

…and why you might not

If you buy a car that’s more than 10 years old, the biggest problem is likely to be wear and tear. Older cars are more likely to break down or need something fixing, and if you have to pay out for a new gearbox or indicator bulb, you may not have saved much money in the long run than if you’d bought a newer model.

Older cars may also have less reliable history, so you might not be able to be sure if there are any pre-existing issues. Even if the dealer you’re buying it from is reputable, the person who sold it to them may not be, so make sure you can get full details of its MOT history and the engine size. You can double check this on the DVLA website to be sure.

It is also important to check if the second hand car you have your eye on has any outstanding finance due on it (such as an HPI check), or whether it has previously been written off in an accident. Reputable dealers will provide this information for you. If you are buying from a private seller you may have to fork out for these yourself. Remember if you buy a car with outstanding finance it is quite possible that it will be taken from you leaving out of pocket and with no car.

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