Old or new – which car is cheaper to own?

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Thinking of buying a new car? With the new ‘63’ vehicle plate registrations about to land, it’s tempting to splash out on a new model. And while it’s going to cost you upfront, the good news is that new cars are much cheaper to run than older models, saving you as much as £748 a year in petrol, road tax and servicing costs.

Our analysis at MoneySuperMarket has found that a brand new Peugeot 208 costs £1,030 per year to run, which is £748 cheaper than the costs associated with a five-year old equivalent vehicle. A new Ford Fiesta will cost £1,134 to run per year compared to £1,673 for a five year old model, an extra £539.

Newer cars are generally cheaper to run because they have more energy efficient engines, meaning they guzzle up less petrol. The Government’s road tax, which is calculated according to energy size or carbon dioxide emissions, is also likely to be much lower.

Added extras

And when buying a car brand new, many dealers will throw in extra offers such as free insurance, servicing or fuel for a set period – which makes your initial running costs even lower. If this isn’t offered upfront it’s worth asking to make sure you get the best deal possible.

We found that a BMW 3 Series was £1,002 cheaper, a Vauxhall Astra was £380 cheaper and a Nissan Qashqai was £184 a year cheaper than their five year old counterparts.

Of course, buying a new car is always more expensive than a second hand model. But it is reassuring to know that your monthly running costs will be lower if you do spot a competitive deal on the forecourt.

For example, a driver with a new Peugeot 208 pays no road tax, where as someone with a five-year old model would pay £140 a year. The newer model can expect to consume about £1,030 of petrol a year, compared with £1,177 for the older car. And with dealerships offering free insurance for the first year, this could also save you an average of £233 on the older model. A driver with an older car might also expect to pay £55 for an MOT, £155 for servicing and £18 for breakdown cover.

Even without a special offer on insurance, the annual costs may be cheaper for newer models, especially when it comes to sporty or fast cars. The average insurance for BMW 3 Series, for example, costs £3,228 for a five-year old model but this falls to £2,760 for the new version – a saving of £468.

It’s always worth checking how much a car’s road tax and insurance costs are likely to be before buying, so you can avoid any nasty surprises. Comparing the cost of older and newer models will help you decide which to buy. Here at MoneySuperMarket we will help you find the cheapest car insurance deal.

Paying for your motor

There is a confusing array of options when it comes to paying for a new car and you need to think carefully about which is best for you. Remember a best-buy personal loan can work out cheaper than finance deals offered on the forecourt. The lowest rates also apply for loan sizes of between £7,500 and £15,000 which could be just what you need.

Read our guide on How to fund your new car before going to the showroom so you’re armed with all the facts you need to make the right decision.

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