Brand New vs Nearly New

There’s no denying that buying a brand new car has its advantages. You get to choose the specification of the car; you’ll have no worries when it comes to service history; and you might even receive ‘great deals’ from the dealer.

However, did you know that a new car loses an average of 20% in value as soon as you drive off the forecourt?1 By the end of year 1 it will have depreciated by approximately 40%2

So, how about buying a ‘nearly new’ car?

A ‘nearly new’ car is usually considered to be less than 12 months old and have no more than 5,000 miles on the clock3. These types of cars are generally what the dealer uses for demonstrations and test drives.

Buying a ‘nearly new’ car could save you a lot of money and you could still enjoy many of the benefits a new car offers4. This is because a ‘nearly new’ car is just a brand new car that has already had one previous owner – the dealer5. Meaning the car has already taken the showroom depreciation hit without you having to foot the bill.

Let’s look at some of the other benefits of buying a ‘nearly new’ car

  • Enjoy the latest specification of a new car, as the car is likely to be less than 1 year old
  • Expect to receive a discount of 5-25% from the new car price - dependent on the make and model of the car6
  • As with brand new cars, you save on MOT costs as the car will be less than 3 years old7
  • Your car will be covered by the standard manufacturer warranty – dependent on car registration date and date of buying the car
  • As the car is already built, there isn’t a long waiting time to receive it, as opposed to new cars which have a factory build time

Things to Consider When Buying Nearly New

You could argue that the advantages of buying a ‘nearly new’ car make it a done deal, but you should be aware of some of the downsides.

  • You may be restricted when it comes to choosing the car’s specification, colour and optional add-ons, as the dealer has already bought their stock. But they normally choose what they think the car buying market wants, so it might not mean you miss out8
  • Headline deals for car finance typically apply to brand new cars only, so you may not get the best deal with the dealer8. However, dealerships aren’t the only finance option, you may find cheaper car finance options elsewhere for ‘nearly new’ or used cars
  • And, as you will be the second registered owner of the car, this could affect the car’s resale value1

Buying 'used'

Whilst we are covering alternative options to buying brand new, we can’t forget to mention the advantages of buying a ‘used’ car:

  • With approximately 8 million used cars sold each year, you won’t be short of options9
  • As with ‘nearly new’, you avoid the showroom depreciation hit2
  • Many dealerships now offer an approved used car warranty, which is an extension of the original manufacturer’s warranty, giving drivers extra peace of mind when buying ‘used’10
  • Some dealerships offer an ‘approved used scheme’ where they select the best used cars, passing their history and mechanical checks
  • Buying a used car privately could also get you a better price, but just bear in mind that you may not have as much security as with buying with a dealer nor the flexibility in how you finance the car1

Brand new, nearly new or used?

Why pay more when you can benefit for less. Whichever option you decide is best for you, we could help.

View our car financing optionsView our car financing options
  1. https://www.whatcar.com/advice/buying/should-i-buy-a-new-nearly-new-or-used-car/n1107
  2. https://www.theaa.com/car-buying/depreciation
  3. https://www.buyacar.co.uk/cars/1403/what-is-a-nearly-new-car
  4. https://www.autoexpress.co.uk/car-news/107223/should-i-buy-a-nearly-new-car
  5. https://www.moneyadviceservice.org.uk/en/articles/where-to-buy-a-new-car#buying-a-new-car-from-a-dealer
  6. https://www.rac.co.uk/drive/advice/buying-and-selling-guides/pre-registered-cars
  7. https://www.gov.uk/getting-an-mot
  8. https://www.carbuyer.co.uk/tips-and-advice/149111/new-used-or-nearly-new-which-is-best-for-you
  9. https://www.theaa.com/used-cars
  10. https://www.autoexpress.co.uk/car-news/103763/car-warranty-advice-manufacturer-warranty-cover-and-extended-warranties-explained
     

Important legal information

Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.