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Driving Into the Future: Why Upgrading to a Newer Car is a Smart Financial Move
Are you contemplating upgrading your trusty old car to a newer model? At Marsh Finance, we understand many car owners’ dilemma: Should you stick with your tried-and-tested older vehicle or take the leap into something more modern? It’s a question that transcends mere aesthetics; it’s a financial decision that could impact your wallet significantly.
In this article, we’ll explore why purchasing a newer car can make sound financial sense in the long run. From the cost of repairs to fuel efficiency, insurance rates, and safety features, we’ll delve into the factors that can sway your decision.
Let’s discover why upgrading your car might be right for you.
The Spiralling Cost of Repairs: Old Cars Versus New
Let’s face it: like humans, cars often become more high maintenance as they age.
Routine wear and tear and the increasing likelihood of faults mean that older cars require frequent mechanic visits and steeper repair bills—the number of repairs and the average repair cost rise yearly. According to an analysis of extended warranty claims by Intelligent Motoring, vehicle repair costs have increased by 40% from 2018 to 2022, so upgrading your vehicle every four to five years can save you a substantial amount of money over time.
Insurance Myths Debunked: The Real Cost of Insuring Newer vs. Older Cars
One common misconception is that newer cars are more expensive to insure. While it may seem logical that a brand-new vehicle would have a higher replacement cost, insurance companies consider various factors when calculating premiums.
In most cases, you’ll find that it’s cheaper to insure a newer used car than an older one. Newer cars tend to have lower breakdown rates, undergo regular servicing, and boast higher safety standards. These factors can result in more affordable insurance rates, ultimately saving you money.
Are Newer or Older Cars More Fuel Efficient?
Advancements in automotive technology have truly transformed fuel efficiency.
Each year, newer vehicles benefit from innovations that make them significantly more fuel-efficient than their predecessors. The savings at the pump can be substantial. Consider this: a modern Ford Fiesta can achieve impressive fuel efficiency, costing just £561.27 per year to fuel for the average UK driver. Compare that to an older vehicle like the Honda Accord 1.8i (1999-2003), which would set you back £1,652 per year in fuel costs. The disparity grows with mileage, making a strong case for upgrading to a more fuel-efficient vehicle.
Are New Cars Safer?
One glaring difference emerges when comparing older cars with their newer counterparts: safety features. Modern vehicles come equipped with advanced safety technologies like:
- Antilock brake systems
- Traction control
- Electronic stability control
- ISOFIX child seat anchors.
All cars manufactured since 1997 undergo rigorous safety testing by Euro NCAP. If you own a car older than that, it might not have undergone such thorough safety assessments. If safety is a priority for you, a newer vehicle is the better option.
Euro NCAP provides a valuable tool for comparing the safety of your current vehicle with potential new models, helping you make an informed choice about whether to buy new or used.
Should I Buy a Brand-New Car?
While it’s clear that upgrading to a newer used car can provide numerous benefits, you might wonder if buying a brand-new vehicle is a better option. One crucial factor to consider here is depreciation.
When you drive a new car off the lot, it experiences an immediate drop in value, typically ranging from 10% to 30%. Over the first five years, the average new car loses a staggering 60% of its value.
This is where a newer used car stands out, typically 3 to 7 years old. You get all the benefits of a modern vehicle without the steep depreciation, making it a savvy financial choice.
Let’s Do the Math: Old versus New
To illustrate the financial advantages of a newer car, let’s look at a real-world example. Research indicates that running a brand-new vehicle can be up to 73% cheaper than a model just five years older. This significant difference in running costs can offset the initial higher purchase price. Newer cars often have warranties, lower insurance rates, and enhanced fuel efficiency. Considering these factors alongside attractive financing options, buying a new or nearly new vehicle can make excellent financial sense.
Ready to Upgrade to a Newer car?
At Marsh Finance, we specialise in car finance solutions tailored to your needs. Apply for car finance with us today without impacting your credit score, and let’s get you behind the wheel of your dream car. Make the smart choice for your finances and your safety – choose Marsh Finance.
The information contained on this Website and the resources available for download through this website is not intended as, and shall not be understood or construed as, financial advice. Marsh Finance is a car finance lender and not a financial advisor, nor do we hold ourselves to be, and the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.
Rates from 12.9%
Representative example: borrowing £10,000 over 60 Months with a representative of 23.0% APR, an annual interest rate of 23.0% (fixed) and a deposit of £0.00, the amount payable would be 59 repayments of £269.58 per month, with one final repayment of £279.58 (which includes the option to purchase fee of £10.00), with a total cost of credit of £6,184.80 and a total amount payable of £16,184.80. Marsh Finance Limited are a lender, not a broker.
Marsh Finance Limited are a lender, not a broker.
This is for illustrative purposes only and is not a quote or an offer of finance.