New & Used Car Production is Decreasing BUT...
Posted on 17th December 2019
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New car production and used car sales within the U.K. are decreasing. However, HPL’s sales have increased by 21% the past year. HPL are exploring why...
People often decide to buy a new car over a used car because you can choose your exact specification. This makes the car feel more unique and personal to the buyer. The specification will be the best technology and the newest features for comfort, performance and safety. You’ll have to wait a few years to get them in used cars.
However, this would mean that you have to wait for your car to be built. Whereas, when buying a used car, they are available immediately. Especially here, at HPL, where you can drive away in a day. We have specific cars in stock which are prepped, valeted and ready for someone to take home the same day you visit. To find out more about this come visit our Oldham or Atherton site https://www.hplmotors.co.uk/dealerships
New cars typically have longer warranties than used cars. This makes the new car more reliable than a used one. If a new car breaks down, you can have it fixed for free under the included factory warranty, at least for the first 36,000 miles or three years that most is usually offered. This would put the customers at a peace of mind as they know it won’t cost them anything extra if anything goes wrong.
Yet, cars have never been more dependable than they are today. It’s not uncommon for some cars to deliver more than 100,000 miles before needing major repairs. So, after the first three months or first 36,000 miles, the customer will have to continue to purchase warranty on their car, similarly to used car customers. Therefore, questions the effect this free warranty has on new cars, as a problem might not occur until after three years or 36,000 miles.
Here, at a HPL, you can buy up to a three year warranty. Our one year warranty is £399, two years is £599 and three year warranty is £799. When you buy a car from us, three months warranty is included in the care package.
A massive drawback of purchasing a new car is that it’s value depreciates on average 20-30% in the first year. The rate of depreciation is highest in the first years, and then starts to level off. After around three years, a car can depreciate to 50%! In some cases, when a new car leaves the showroom it can depreciate around 9%.
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For example, if you bought a new car for £30,000, after the first year it would be worth £21,000-£24,000 (20-30%). Even more punishing, is that this car would lose £6,000 as you swiftly and merrily drive off, out the showroom. Then, selling this car three years later, it would be priced around £15,000. Therefore the car has cost you £15,000 in depreciation.
Whereas, used car depreciation isn’t as drastic. An example of this would be, using the same car, but it’s three years old when you buy it, it would cost you £15,000. Three years pass and you want to sell it on, it would cost £10,000. So the used car depreciation cost you only £5,000.
However, not all cars depreciate at the same rate. Some brands are know for holding their value exceptionally well. For example, Mini and Audi are known to depreciate the slowest in the UK. Whereas, Maserati Quattroporte and BMW 7 Series are know to depreciate around 70%. When you add in possible new-car incentives and low-interest financing, there are times when buying a new car doesn’t cost much more than buying a one or two year old car.
Another reason to support having a used car is that the car insurance will be lower. This is because the vehicle is worth less, it cost less to insure it when your collision and comprehensive coverage. You can also drop collision and comprehensive coverage, which cover any repairs to your car, and save even more.
There are no right or wrong to which ever type of car you buy.