The best excuse you'll ever have for buying a new car

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"We should get a new car. It'll be so much cheaper to run, it'll actually save us money." It's a familiar argument for anyone who has ever trawled the second-hand car dealers with someone who desperately wants a flashy new model. But could it actually be true?

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Analysis by MoneySuperMarket looked at the running costs of popular new and old cars, and discovered that people who upgrade their car could save 23% on running costs by buying something newer.

It examined the costs for five popular vehicles – Nissan Qashqai, Volkswagen Golf, BMW 3 Series, Ford Fiesta and Vauxhall Astra – and found in all five cases a brand new model incurs significantly lower running costs (including fuel, road tax, insurance and MOT) compared to a five year old model of the same vehicle.

Overall, the annual cost of running a new car is £1,398 on average, compared to £1,645 for models that are five years old – a £247 difference or 15%. Of the five cars analysed, the biggest difference was the Volkswagen Golf, where a saving of £363 (23%) can be made on the running costs of a new car compared to an older model. This brings costs down from £1,592 to £1,229.

For a brand new Ford Fiesta (1.25L, petrol) the annual running costs are even less at £1,210 per year, which is £226 cheaper than the costs associated with a five year old version. Similarly, a new Nissan Qashqai will cost drivers £1,472 to run annually, compared to £1,731 for a five year old model, a difference of £259.

Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: "When making decisions about whether to purchase a new or used car, drivers may be deterred by the upfront cost of a fresh model, but it can be the best value option in the long run. Fuel efficiency, servicing costs and improved carbon emission credentials all play a part in reducing the cost of running and insuring a new car. A brand new model will have a higher price tag but showroom discounts, finance deals and cheaper running costs mean the difference can be reduced. Many new cars also come with a lengthy warranty, which will cut maintenance costs for several years in some cases."

The problem

It's a compelling argument, but it's not quite the same as a new car actually being cheaper.

According to, the average cost of a five year old 1.4 litre Volkswagen Golf is around £8,000. Compare that to a new one, which hefty negotiation could get for £16,000. Assuming you owned both for five years, the running costs would be just under £2,000 less for the newer model. Of course, as Pratt points out, you've also got the cost of servicing and maintenance, but unless you were particularly unlucky, you'd still be better off with the older car.

Of course, the longer you owned both cars, the better value the newer one would be. If you kept them both for a decade, the newer one would cost £4,000 less in running costs. You would also be left with a ten-year old car worth about £3,000 and a 15-year-old car worth about £900. The older car would therefore only have to have cost £1,900 more in maintenance for you to break even.

There is a small chance, therefore, that you could make the argument work if you planned to keep the car for long enough - but you'll still be chancing your arm.

The cheapest cars to insure
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The cheapest cars to insure

Price new: £5,995

Dacia has made a big impact in the UK with its line of affordable motors.
The Sandero is the foundation of the brand's offering and is famed for being the UK's cheapest car.

With a group two insurance classification it's also one of the cheapest cars to insure right now.
The entry level Access model is sparsely equipped, but it has a practical interior, big boot and low running costs.

Price new: £8,060

The Seat Mii is a small city car which Auto Express praises for its spacious interior, good build quality and supple ride.

All models are in insurance group one, bar the group two Sport version.
The Mii is available in three-door or five-door styles, but both measure just 3.5 metres, making it perfect for getting around town.

Price new: £8,090

The Skoda Citigo was crowned Auto Express Best City Car 2013.

The magazine praised its low running costs and practicality as well as its grown up driving experience.
Like its Mii stable mate the Citigo has group one insurance in all apart from its top specification model, making it one of the cheapest cars to insure.

Price new: £8,265

The third of the Volkswagen's group of three city cars to make the list is the Up!

Auto Express says the Up! was 'born to rule' city streets with its small dimensions and lightweight body.
There's three versions of this fun city car; Take Up! has a group one rating as does Move Up! while the higher spec High Up! gets a group two classification.

Price new: £8,345

The Hyundai i10 is another car which can get you a cheap insurance quote thanks to a group one insurance rating across all the 1.0-litre petrol models.

Auto Express says the new 2014 i10 offers big car features in a small package. And for £8,345 you also get Hyundai's five-year warranty and roadside assistance package.

Price new: £8,995

Vauxhall has managed to squeeze one of its full sized Corsas into insurance group two.
Auto Express says the 1.0-litre ecoFlex model has the lowest insurance costs of any mainstream supermini.

The eye-catching design, solid interior and big-car features make it an appealing buy for drivers.

Price new: £9,575

The Smart car caused a bit of a stir when it first appeared thanks to its dinky dimensions and bold two-seat layout, making it very useful for driving about town and absurdly easy to park.

The Smart ForTwo is the latest incarnation, which keeps to the same formula; it still has only two seats and is one of the smallest cars on the road measuring just 2.5 metres long,
The entry level 0.8- and 1.0-litre models qualify for group two insurance.

Price new: £11,810

The Peugeot Partner Tepee 1.6 VTi is the passenger version of the Partner van and according to Auto Express easily the most spacious new car that currently qualifies for a group two insurance rating.

It's got a boxy shape that provides plenty of room and has sliding doors which make it a very practical and flexible family car.

If you're after something smaller the Peugeot Bipper Tepee, which is the smallest of Peugeot's family of Tepee MPVs, also gets a group two insurance rating.


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