Should I buy a new or used car?

Buying your next car usually starts with one choice: brand new, or one that's already had a keeper. Most UK drivers pick the second, and 7,807,872 used cars changed hands in 2025, according to the SMMT. That choice often comes down to the price gap you can see on the forecourt. What the gap hides is what each option costs you over the years you own it, in lost value, repairs, MOTs and finance. To show that hidden cost, we've used our own study of 41,298 used cars to compare the two, alongside the rules that protect you when you buy.

Is it better to buy a new or used car in the UK?

A used car is the better buy for most people, as long as it's a few years old, comes from a dealer and has a clean history. That's because it costs less to buy and has already taken the steepest part of its drop in value. In our study, the effect was clearest in cars bought at 3 years old, which lost the least value over the next 3 years, at 23.0% of their price.

A new car is worth it when something only a new car gives you matters more than that lower price. That something could be a long manufacturer warranty, the exact spec and colour you want, or a deal that only applies to new cars, such as the government's Electric Car Grant. A new car also suits you if you plan to keep it for many years, because you'll then know its full history from the first mile.

Weighing those two sides, we'd pick a 2- or 3-year-old car from a dealer for a typical buyer. If the newest tech or a long warranty matters more to you, look at a new or pre-registered car instead. And if your budget is tight, an older used car costs fewer pounds a year in lost value, though it brings more repair risk in return.

What counts as a new, used or pre-registered car?

A used car is any car that has already had a registered keeper, so it's the ownership record on the V5C logbook that makes a car used, not its mileage. That's why a car with only a few delivery miles can still be sold as used. Because of that rule, you'll see several labels on the forecourt:

• New: you're the first registered keeper, and you can usually order the spec and colour you want.
• Pre-registered: a dealer or carmaker registers a brand-new car in its own name, often to hit a sales target, then sells it on with delivery miles. You become the second keeper.
• Ex-demonstrator: a car the dealer has used for test drives, so it's usually a few months old with more miles than a pre-registered car.
• Nearly new: a sales label rather than a legal term, used for young, low-mileage cars.

All four types are sold by dealers, so the Consumer Rights Act 2015 covers them just as it covers any used car from a trader. They also follow the same MOT rule, with the first test due 3 years after the car was first registered, not 3 years after you buy it.

Why buy a new car instead of a used one?

Buying a new car makes sense when you value certainty over the lowest price, because you're the first keeper and nobody else has driven it hard, skipped a service or hidden a repair. That certainty is worth most if you'll keep the car for many years, since the steepest drop in value happens early and a long ownership spreads it across more years of use.

New cars also get deals that used ones don't. Carmakers sometimes back low-rate finance on new models, and when one applies, the monthly gap with a used car can shrink a lot.

Pros and cons of buying a new car

A new car gives you a full warranty and a known history, but it costs the most and loses value fastest in its first few years.

Pros

• Full manufacturer warranty: usually 3 years or 60,000 miles, and up to 7 years with some carmakers.
• Known history: you're the first keeper, so there's no hidden damage or missed servicing.
• Your choice of spec: you pick the trim, colour and extras.
• No MOT for 3 years: the first test is due 3 years after registration.
• New-car-only deals: low-rate carmaker finance offers.

Cons

• Highest price: the same model costs more new than at any later age.
• Fastest drop in value: the biggest loss in pounds comes in the first few years.
• Insurance can cost more: a pricier car with modern sensors and parts can cost more to insure and repair, though it depends on the model's insurance group.
• Waiting time: a factory order can take weeks or months to arrive.
• Negative equity risk on HP: sell early and you could owe more than the car is worth.

Pros and cons of buying a used car

A used or second-hand car costs less and has already taken its steepest drop in value, but you take on more of the risk of hidden faults and repairs.

Pros

• Lower price: you can afford a bigger or better-specced car for the same money.
• Slower drop in value: the steepest fall has already happened, so it loses less each year.
• Wider choice: you can pick from every model and spec on sale, not just this year's range.
• No waiting: you can usually drive away within days.
• Legal protection from a dealer: the Consumer Rights Act 2015 lets you reject a faulty car within 30 days.

Cons

• Less warranty left: a car from a 3-year-warranty brand may have little or no factory cover remaining.
• Unknown history: missed servicing or past damage won't always show, so checks matter.
• More repair risk with age: an old car with high miles is more likely to need parts that wear out.
• Yearly MOT: a car over 3 years old needs a test every 12 months.
• Fewer finance options on older cars: PCP is rare on older cars, and lenders cap the car's age at the end of the deal.

Is a nearly new or pre-registered car the best compromise?

A nearly new or pre-registered car is often the best compromise if you want a car that's new in all but name, because the first drop in value has already been taken by someone else. That drop is big enough to matter. In our Used Car Price Report 2026, the newest cars for sale asked about £4,500 more than ones a year older. There's plenty of choice at that lower price, too, because cars around a year old with about 4,000 miles made up 9.3% of the 85,726 listings we looked at.

Despite the lower price, you still get most of the manufacturer warranty, recent tech and low mileage. Just bear in mind that a young car keeps losing value quickly for another year or two. In our study of how fast used cars lose value, a car bought at under 1 year old lost 26.7% of its price over the next 3 years, more than one bought at 1, 2 or 3 years old. So a nearly new car saves you the first hit, while a 2- or 3-year-old car keeps the total loss lowest.

Pros

• Lower price than new: the dealer or first keeper has absorbed the first fall in value.
• Most of the warranty left: the cover runs from first registration, so a car a few months old keeps nearly all of it.
• Recent tech and low miles: usually the current model, with delivery miles or a few thousand on the clock.
• Available now: it's already in stock, so there's no factory wait.

Cons

• Not the first keeper: the logbook shows the dealer or a previous owner, which can trim the price when you sell.
• No choice of spec: you take the colour and options the car already has.
• Fewer new-car deals: carmaker finance offers usually apply to new cars only.
• Older build than it looks: a pre-registered car can sit in stock for months, so check the build date as well as the registration date.

Because a nearly new car is still a used car, check its history and condition just as you would with any other. That check matters most with an ex-demonstrator, which may have had plenty of different drivers.

What is an approved used car?

An approved used car is a used car sold through a carmaker's own scheme, usually by its franchised dealers, after an inspection and with a warranty included. Those details vary, though, because each scheme sets its own age and mileage limits, number of checks and warranty length, so compare what's actually included.

That extra checking and cover usually means you'll pay more than for a similar car elsewhere. In return, you get a car that's been checked against the carmaker's standards, plus cover that can bridge the gap once the factory warranty runs out. Your Consumer Rights Act protections still apply on top of that cover, as with any dealer sale.

Is a new or used car cheaper to insure?

A used car is often cheaper to insure than the same model new, because it's worth less to replace if it's written off or stolen. That isn't a rule, though, because your premium also depends on the car's insurance group, its security and safety kit, and your own details, such as your age, address and driving record.

Those factors can push a new car's premium either way. Its higher value, and the cost of repairing its sensors, cameras and lights after even a small knock, can make it pricier to insure. But the same modern safety and anti-theft tech can also bring a premium down, so a newer car isn't always the more expensive one.

Since the answer depends on the exact car, the simplest step is to get insurance quotes for it before you commit, not after. That step matters most for younger drivers, where insurance can be the biggest running cost. If that's you, our pick of the best cars for learner drivers is a good place to start.

If you're buying a new car on finance, gap insurance can also cover what you'd still owe if the car is written off while its value is falling fastest.

How much value does a new car lose compared with a used one?

A new car loses more value in pounds than a used one, because it starts from a higher price and falls fastest while it's young. To see how that loss changes with the age you buy at, we compared asking prices on 41,298 used cars for sale. Each car in that sample was matched against others of the same model and spec, so a bigger engine or a pricier trim doesn't skew the result.

The chart shows the loss shrinking quickly after the first year. By 3 years old, a car is past its steepest years, so the 3 years you'd own it are the flattest part of its value curve. In pounds, that means a car worth £20,000 at 1 year old loses about £1,215 a year if you buy it at 3. Buy the same car at 1 year old and you'd lose about £1,757 a year instead.

Going older than 3 isn't always better, though. Buy at 6 or 7 and the car loses a bigger share of its price over 3 years, even if the pounds are fewer, and you finish with a much older car.

All of these figures come from cars already on the used market, so they can't measure the drop from a showroom price to a car's first resale. Our Used Car Price Report 2026 gets closer to it, though, because across 85,726 listings the newest cars asked about £4,500 more than ones a year older. That first-year hit is the reason a pre-registered or 1-year-old car can cost noticeably less than the same car new.

Age isn't the only thing that matters, though, and our study of how fast used cars lose value shows how brand, mileage and model change the loss as well.

What does a manufacturer warranty cover on a new car?

A manufacturer warranty covers faults in how a new car was made, such as a part that fails before it should, but it doesn't pay for servicing, tyres, brake pads or anything else that wears out with use. This means you still pay for every service, and missing one can put the cover at risk.

How long that cover lasts depends on the carmaker. Most give 3 years or 60,000 miles, whichever comes first, but some go further. Kia covers its new cars for 7 years, with a 100,000-mile cap, and Toyota's 3-year cover grows by a year each time the car has a main-dealer service, up to a 10-year limit.

Whatever its length, the warranty belongs to the car, not to you. So a used car that's still inside its warranty passes the remaining cover to you, as long as it's under the mileage cap. A 3-year-old Kia, for example, still has 4 years of that factory cover left.

Either way, a warranty sits on top of your legal rights rather than replacing them. So if a car from a dealer turns out to be faulty, the Consumer Rights Act 2015 still applies whether there's a warranty or not.

What are your rights when you buy a used car from a dealer?

A used car bought from a dealer must be of satisfactory quality, fit for purpose and as described under the Consumer Rights Act 2015, allowing for its age and mileage. Those rights let you reject a faulty car within 30 days, and a dealer can't sign them away with "sold as seen". A private sale gives you far less, because the car only has to match its description, which is why we'd point most buyers to a dealer.

If a car you've bought on finance does turn out to be faulty, our guide to returning a faulty car bought on finance explains what to do.

When does a new or used car need its first MOT?

A car needs its first MOT 3 years after it was first registered, and then once a year, whether you bought it new or used. That clock runs from the first registration date on the V5C logbook, not from the day you buy. So a 2-year-old used car still has a year to go before its first test, exactly as it would if you'd bought it new.

That 3-year rule covers Great Britain, while in Northern Ireland the first test comes at 4 years instead.

Whenever it's due, an MOT only shows the car met the minimum standard on the day of the test, so it's no substitute for a service. Past test results are still worth reading, though, and the free MOT history check on GOV.UK shows them for any car over 3 years old, which makes it one of the most useful things to look at before you buy.

Is road tax cheaper on a new or used car?

Road tax, or Vehicle Excise Duty (VED), is the same yearly amount on most new and used cars registered since 1 April 2017, at £200 a year from April 2026. That flat rate means a car's age makes little difference, with one exception worth checking on a used car.

The exception is the expensive car supplement, an extra £440 a year for cars with a list price over £40,000 when new, charged from the second to the sixth year the car is taxed. Because it's based on that original list price, a 3-year-old car that cost £45,000 new still carries it, even if you buy it for £25,000. Check any car's rate on the GOV.UK vehicle tax rate tables before you buy.

Should you buy a new or used electric car?

A new electric car is worth a look if it qualifies for the Electric Car Grant, which takes up to £3,750 off eligible new EVs priced at £37,000 or less. The discount comes off at the dealer and doesn't apply to used EVs, which makes it one of the few savings only a new car gets.

Once an EV reaches the used market, though, it loses value faster than most cars, at 12.0% a year in our study against a 10.0% average. That faster drop is good news if you're buying a used EV, because you pay less for it, but it's a real cost if you buy one new and sell after a few years.

If you do buy a used EV, the battery is the part to check. Most new EVs carry an 8-year battery warranty with a 100,000-mile cap, so a younger used EV usually still has some of that cover. Get a battery health report before you buy, then see electric car finance for how financing an EV works, and our study of 9,706 used electric cars for what they cost to buy by age, mileage and brand.

Does buying new or used change your car finance?

You can finance a new or used car with Hire Purchase (HP) or Personal Contract Purchase (PCP), but the car's age changes which deals you're offered. PCP keeps monthly payments lower because the lender guarantees what the car will be worth at the end, leaving a final balloon payment if you want to keep it. That guarantee is harder to give on an older car, so older cars usually go on HP or a personal loan. They often get a shorter term too, because lenders cap a car's age at the end of the deal, as our guide to financing an older car [EDITOR: link the older-cars article] explains.

With a new car, the fast early drop in value is the main finance risk. Sell in the first couple of years on HP and you could owe more than the car is worth, known as negative equity, whereas PCP lets you hand the car back at the end instead. Carmakers' low-rate offers on new models can narrow the monthly gap with a used car, so compare the total amount payable on real quotes, starting with our car finance calculator.

How to choose between a new and used car

Choosing between a new and used car comes down to your budget, your mileage, how long you'll keep it and whether you'll finance it. Here's how the main options compare on those points:

Reading across the table, new or pre-registered suits you if you'll keep the car for many years, because it gives you the full warranty and a history you know from the first mile. Those two benefits count for more the longer you own it.

If you'd rather lose the least to depreciation over a few years, a 2- or 3-year-old car from a dealer fits best. High mileage doesn't change that much, because mileage matters less than age. In our study, every 10,000 miles took about 4.7% off a car's value, so a higher-mileage car at a fair price can still be a good buy.

On a tight budget, an older car costs the fewest pounds a year. The trade-off is that its factory cover will have run out, so set money aside for repairs or price up a used-car warranty (if it fits your budget). To work out what you can spend, our guide to how much to spend on your first car helps you set a budget, and our part-exchange guide explains how your current car's value comes off the price.

What to check before you buy a used car

Checking a used car's history before you pay is the best protection you have, because most problems show up in the paperwork before they show up on the road. Work through these in order:

1. Check the MOT history. The free GOV.UK MOT history check shows past failures, advisories and the mileage recorded at each test.
2. Ask for the service history. A full record shows how the car has been looked after, and whether it was serviced on time to keep any warranty valid.
3. Run a vehicle history check. It tells you whether the car has outstanding finance, has been written off or has a mileage that doesn't add up.
4. Check the V5C logbook. The details should match the car in front of you, and the seller should hand you the new keeper slip when you buy.
5. Ask what warranty is left. Find out how much factory cover remains, and what any dealer warranty actually pays for.
6. Test drive it and consider an inspection. An independent inspection costs extra, but it can spot problems a test drive won't.

Once a car passes those checks, running costs are the next thing to compare. For that, our list of the cheapest cars to run in the UK and our pick of used hybrids under £10,000 are good places to start.