Old or new? Financial expert shares 4 things to think about when choosing a new car in 2024.

 

In June 2023, there were 33,448,171 cars registered in the UK. The average household in England owns 1.22 cars; however, this statistic includes London, which has the lowest rate of car ownership in the country. If we exclude London from the data, the average rises to 1.3 cars per household.

1.9 million new cars were registered in the UK last year, an 18% growth on the figures recorded in 2022.

According to Top Gear, the five best-selling cars of 2023 were:

1. Ford Puma

2. Nissan Qashqai

3. Vauxhall Corsa

4. Kia Sportage

5. Tesla Model Y

The average cost of a car in the UK sits somewhere between £12,000 and £28,000. The exact price will vary depending on the model, condition, and size of your car.

1. Buying a brand-new car

‘When ordering a new car, you’re usually able to choose specifics, such as colour and the interior features, although bear in mind that you may have to wait months for your new car to arrive,’ Alex says. ‘With no miles on the clock, though, a new car could be more reliable and require less maintenance than a used car. New cars usually come with a warranty, which either covers a certain amount of years or a specific number of miles. A car warranty offers monetary protection against certain types of damage, including mechanical failures.

‘Purchasing a brand-new car is likely to come at a cost – the exact figure will vary based on the individual brand and model – and it’s worth noting that the value of the car usually decreases as soon as it’s driven off the forecourt.’

2. Buying an old car

‘Second-hand cars generally cost less than brand-new models, but of course, it’s important to weigh up the pros and cons and ensure that you’re actually getting a good deal. While some general wear and tear is not uncommon in pre-loved cars, you won’t be saving money if the vehicle has a list of issues that could end up costing you more in the long run. You should do your own thorough research into the vehicle’s warranty, as there’s a chance it could have little to none left. If you’re buying from a private seller, ask for a copy of all relevant paperwork so you know exactly what you’re getting. The last thing you want is to have to unexpectedly fork out for a new engine a month down the line.’

3. Different schemes

‘Cars are expensive, and paying for them upfront with cash or card isn’t always possible. There are a number of alternative ways to buy a car,’ says Alex.

‘Buying a car using a Hire Purchase agreement means that you secure the loan you have taken out against the car. You’ll generally be required to put down an initial deposit upfront and will then repay the money borrowed, plus interest, in monthly instalments. Be aware that you will not own the car until the last payment has been made and, if you fail to make the repayments, the car could be repossessed by the lender.’

‘PCP loans cover the difference between the cost of the car and its estimated value at the end of the agreement. This will be based on the predicted mileage. You risk being charged additional fees if the car accrues any damage or you exceed your set mileage.

You have multiple options to consider once the repayment term has come to an end. You could choose to return the car, pay the resale value to keep the car, or buy another vehicle using the resale value.’

‘Cars obtained through PCH are hired for a set period of time – you never actually own the vehicle. PCH grants you access to a car at a monthly fixed rate. As the upfront price covers any relevant servicing and maintenance, your monthly repayments may be high.

Ending the contract early and going over the mileage limit may result in additional charges.’

4. Money saving tips for drivers

Compare petrol prices. You can use a comparison site such as Go Compare to find the cheapest petrol and diesel in your area.

Compare car insurance. You can also make use of comparison sites when searching for the best deal on your insurance. You’ll usually need to provide your personal details, as well as your driving licence and car details, and your no-claims history, if applicable.

Use apps to find cheap or free parking. Parkopedia is a website and app that lists parking options in your location of choice. Simply input your destination and how long you’ll need the space for. Results can be filtered by price, which will show you any free options first.

Reduce the number of journeys you take. Try to walk where possible, if possible. If you’re nipping out to do a quick midweek top-up shop, could you go on foot rather than take the car? Not only will this simple swap benefit your wallet and your health, but also the environment – what’s not to love?

Finally, consider whether you really need a car. For example, if you work from home every day and have good public transport links nearby, you may be intrigued to trial a car-free couple of months. Of course, there are numerous details to carefully consider before you commit to ditching the car altogether, but it could well be a great money-saving option for some.

 

-ENDS-

The thimbl. credit card and the thimbl. Loan are issued by Vanquis Bank Limited. Digitonomy Limited (trading as thimbl.) is a credit broker not a lender, and provides its services to Vanquis on an exclusive basis in respect of each of these products. Digitonomy is paid commission from Vanquis for these services. If Vanquis are unable to provide you with one of these products, Digitonomy will try to find you an alternative product and will receive commission from the provider of that product if you enter into an agreement for it. Digitonomy's registered office is: Steam Mill Business Centre, Steam Mill Street, Chester, Cheshire, CH3 5AN. Registered in England and Wales, under company number 08385135. Digitonomy is authorised and regulated by the Financial Conduct Authority, and is entered on the Financial Services Register under reference number 690249. Licenced by the Information Commissioners Office, (registration number ZA007309).

Website: https://www.thimbl.com/

Alex Kosuth-Phillips - Personal Finance Expert at thimbl.

Alex is the Compliance Manager for thimbl.com and is responsible for ensuring our website follows Financial Conduct Authority (FCA) regulations. He is passionate about ensuring that we treat all our customers fairly, and do all we can to ensure a positive experience and outcome for our customers.

Alex has been featured in various news articles and even on BBC television, providing information and guidance on how to avoid financial fraud and scams.