Car buyers can buy and run a new car for less than a used one

It can be cheaper to buy and run a new car than to opt for a used example thanks to fierce competition in the car market. New research from Carbuyer magazine shows that in many cases, logic can be turned on its head: owning a brand new car can cost you up to £4862 less than a used car.

Carbuyer investigated 40 popular car models on the market. Checking prices for low-mileage cars under two years old, it then compared them with the best deal prices for identical but brand new cars from a variety of sources.

In around half the cases investigated, new cars were cheaper to run, including the cost of finance and the depreciation during three years of ownership.

The secret lies in sourcing the car at a discount from one of the new breed of car retailers. This takes care of much, if not all, of the early depreciation (the amount of value a car loses over time) and means that you have much lower finance costs.

For example, it is £4862 cheaper to own a brand new Jaguar X-TYPE over a three-year period than it is a used one. You can buy a new X-TYPE 3.0 V6 Sport for £21,383 from German import specialist EGS - some £3887 less than the list price. In contrast, Carbuyer found a nearly-new example with 9000 miles on the clock for a stiff £24,995 at one Jaguar dealership. Factoring in the cost of financing the car over three years and how much it is worth at the end of the term, the total cost of ownership is £14,523 for the new one and £19,385 for the used one.

Other examples where new cars are cheaper than nearly-new cars include:

Cost of ownership over three years
New Nearly-new Saving
BMW 318ti SE Compact £12,326 £13,441 £1115
Citroën Xsara VTS Coupe £8286 £9169 £883
Renault Clio Sport £8945 £9390 £445
Seat Leon 1.8 20v SE £8248 £9738 £1490
Skoda Fabia 1.4 Comfort £5700 £6338 £638
VW Golf 1.9 GT TDi PD 130 £10,528 £12,146 £1618

But new doesn't always beat nearly-new. In around half of all cases investigated, nearly-new cars were available at a good enough price to be cheaper to own than a new car. For instance, buying a nearly-new Mitsubishi Carisma 1.8 GDI at a bargain £6999 means it costs just £6407 to run over three years - compared to £10,354 if you bought the same car new.

"Our research shows just how important it is to shop around when you're buying your next car," says Chris Rees, editor of Carbuyer magazine. "It is clear there is no hard-and-fast rule for deciding whether to buy new or nearly-new. More than ever, buyers need to take care and do their sums properly."

Carbuyer lists all 2400 new cars on sale in the UK and identifies which retailer offers the best deal on each one - whether from franchised dealers, car supermarkets, the internet or importers. The average saving on list price in the January 2003 issue is £2084. This represents an overall potential saving for UK car buyers of £5.1 billion over a year.