A price comparison by What Car? magazine shows motorists save money if they buy a new car
A sharp hike in used car prices means motorists could be better off buying a new car than looking to the second-hand market, research by What Car? magazine showed today.
The government’s car scrappage scheme, aimed to boost the ailing car market by incentivising motorists to trade in old vehicles, and competition among manufacturers mean some popular models can be bought more cheaply new than when they are up to a year old.
The magazine found that a used VW Golf 1.6 TDI S with 200 miles on the clock was selling for £16,200, while under the scrappage scheme the same vehicle could be bought new for £12,430.
Similarly, a second-hand Fiat 500 1.2 Pop registered in March 2008 which has done 23,000 miles costs from £6,995, but it was possible to find the same car new for £295 less if you were trading in an older vehicle.
What Car? said even motorists who could not take advantage of the scrappage scheme should consider buying new because in many cases the difference in price was less than £2,000.
When the extra year’s warranty available on new cars and more competitive dealer finance was taken into account, some of this difference was eroded, making new cars look like a much more attractive proposition, it said.
The editor of What Car?, Steve Fowler, said: “It’s a bizarre market this year: new car prices have already risen by 9.5%, but used car prices are an astonishing 30% higher than they were a year ago.
“It’s long been the case that nearly new cars represent excellent value when compared to new, but not right now.”
Barrie Childs from London has just bought a new Hyundai i20 after realising that it offered a better deal than an equivalent used car if he traded in his 10-and-a-half-year-old Peugeot 206.
“The new car had £2,635 knocked off the price from £9,90 to £7,355. For the deals in the market, this make and model certainly surpassed the nearest competitors,” he said.
“Where a number of other makes/models were of similar price, this car had a variety of extras included in the £7,355 price, such as air-con, alloys, five-year warranty and one year’s free RAC European cover.”
Childs said he could have sold his old car for around £1,000, but this was outweighed by the scrappage offer, which is only available on brand new vehicles.
He was disappointed to have to scrap it, but said the incentive was too tempting.
“It was well looked after and in very good condition, so was a real shame to see it go. I’m sure there are a hell of a lot more death-traps on the road that should have been crushed before my old Peugeot 206.”
The latest figures from carmakers suggest the car scrappage scheme has been a success. On Tuesday, the Society of Motor Manufacturers and Traders (SMMT) reported that 367,929 new cars were registered in September, an 11.3% increase on the previous year.