New vs. Used Cars: Which Is Better For Students?

Choosing the right car can be challenging, especially for students who must weigh practicality against cost. Whether you’re heading to university or starting your career, deciding between a new and a used car requires thought about upfront costs, reliability, and ongoing expenses.

New cars often offer advanced features, but used motors provide potential savings. As a student, it’s important to choose wisely based on your budget and needs. Here’s a guide to help you decide.

Cost and budget considerations

It’s no surprise that new vehicles tend to have higher purchase prices. While finance plans can make ownership more manageable, there’s still the issue of quick depreciation. New cars lose about 50% of their value within three years, which can feel like a considerable loss for budget-conscious individuals.

Used cars can be far more affordable, with popular models like the Ford Fiesta and Volkswagen Polo often available at bargain prices. While financing options are typically less attractive when buying used, students can save upfront and also buy outright, avoiding long-term finance altogether.

Plus, the slower depreciation means these cars hold their value better. This could make future resale easier and potentially recoup some of the initial expense.

Reliability and safety

Reliability is another key aspect, especially as many people don’t want to foot the bill for frequent repairs. New cars often come with warranties that last between three to five years. They should also include the latest safety technologies, like lane assist and automatic emergency braking.

Additionally, these cars won’t need an MOT test until they’re three years old, which could mean fewer repair costs in the short term.

Used motors can also be reliable, particularly well-maintained models with solid reliability reputations. However, they will need a MOT test annually which could lead to you paying for minor repairs.

It’s also worth noting that some safety standards evolve yearly, so while older models may have a five-star Euro NCAP rating, updated safety criteria could reduce this score if the car were retested.

This is particularly important for those who prioritise safety while driving in busy university cities or unfamiliar areas.

Insurance costs

Insurance is a significant consideration and can be costly for first-time drivers. Generally, new cars can be more expensive to insure due to their higher value and repair costs.

For students on a budget, finding a good car insurance policy is key. Choosing used cars in lower insurance groups can reduce premiums and provide substantial savings.

Students might also consider telematics or “black box” insurance, which adjusts premiums based on driving behaviour. As a result, you’ll be rewarded for your safe driving with lower costs. This is especially useful if you don’t drive regularly or you only make short journeys.

Additionally, choosing a low-spec model and opting for third-party-only coverage may further lower premiums.