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The cost of running a new car versus a used car

Holly West-Robinson profile

Holly West-Robinson

May 30, 2016

Owning a car 27 min read

Buying your first car can be a daunting experience and a brand new car may seem unaffordable for young drivers. Did you know that, with the cost of insuring a used car in your first year and the ongoing running costs, a new car from Marmalade may
work out more affordable than you think? At the end of the four years you can choose to hand the car back and get a new one or pay an optional payment to keep the car at the end of the period.

We’ve created a handy infographic which compares the cost of running a brand new car over 4 years, versus a 3 year old car, looking at the costs you are likely to incur for both cars. The price per month for a new car will vary dependent on age and postcode and the prices shown are a representative example. We’ve chosen a Fiat 500 POP, as it’s one of our most popular cars for young drivers! Based on our comparison, for just over £400 you can drive a brand new car – I don’t know about you but I’d much rather drive a brand new car!

Get a quote for a brand new car, on our Fuel & Go scheme with just your age and postcode.

New vs Used

Hey! What do you think of my shiny brand new motor?
You can’t afford a new car.
Been visiting the bank of mum and dad again have you?
Nope.
This gorgeous set of wheels would only cost you less than £500 more than a second hand car over the first 4 years!
No way? How did you work that one out?

Neither of us have the money to buy with cash, right?

Right!
So I’ve looked at the costs of running and maintaining both a new and
3 year old car, bought on finance over 4 years – and I’ve split it into an
average monthly cost over 4 years.

Average Monthly Cost

£331.91
£269.08
£271.58
£274.33
£286.72
See. The average cost per month for a new car over the first 4 years is only £298.11 compared with £289.42 running a second hand car.
Wow, it looks like I may be able to drive a brand new car after all!
Yep. But hold onto your hat –
I want you to understand how I worked it all out, and what happens at the end of the 4 years, before you rush out and buy one!

Fast forward 4 years

If you’ve bought second-hand your running costs are going to start creeping up. Could be time to sell one way or another.

And if I’ve gone for the new car?

You could hand the keys back to the garage and do it all over again with another brand new car in four years’ time.
Or make the optional final payment of £3,226.50, which includes the document fee, and this little baby could be all yours!
I like.
How we calculated it all
Insurance
Insurance quotes for both cars are based on our
New Driver Insurance. You can get your own guide price using
Quick Quote.
Our insurance costs are based on an 18 year old applicant living at ST3 3DG with no previous claims or convictions on 31.03.2017. As we can’t predict premiums two years in advance, we have carried the same premium for year two forward to years three and four.
+

Assumptions

Mileage worked out on 8,000 miles per year.

Excess mileage charged at 8p per mile with Fuel & Go.

2014 plate

Fiat 500 POP 1.2l 3dr
Amount paid over 4 years
£13,892.32
£4,290.76
£357.56
£4,290.76
Year 2
£3,169.52
£264.13
£7,460.28
Year 3
£3,199.52
£266.63
£10,659.80
Year 4
£3,232.52
£269.38
£13,892.32
Mileage
13000
Value
£6,490.00
Deposit
£500.00
Finance needed
£5,990.00
Representative APR
11.4%
48 monthly payments of
£150.24
Total paid over 48 months
£7,711.52
Final payment
£0
Running costs
Annual repayments (+deposit)
Year 1 £2,302.88
Year 2 £1,802.88
Year 3 £1,802.88
Year 4 £1,802.88
Road tax
£30.00
£30.00
£30.00
£30.00
Insurance
£1,577.88
£816.64
£816.64
£816.64
MOT
£40.00
£45.00
£50.00
£55.00
Servicing & Maintenance
£150.00
£165.00
£190.00
£218.00
Tyres (£60 per tyre)
£0.00
£120.00
£120.00
£120.00
Contingency (work required)
£120.00
£120.00
£120.00
£120.00
Breakdown cover
£70.00
£70.00
£70.00
£70.00

2017 plate

Fiat 500 POP 1.2l 3dr
Amount paid over 4 years
£14,309.20
£2,922.32
£243.53
£2,922.32
Year 2
£3,598.96
£299.91
£6,521.28
Year 3
£3,853.96
£321.16
£10,375.24
Year 4
£3,933.96
£327.83
£14,309.20
Mileage
0
Value
£10,912.73
Deposit
£500.00
Finance needed
£10,412.73
Representative APR
9.9%
48 monthly payments of
£201.86
Total paid over 48 months
£13,465.78
Final payment
£3,226.50
Running costs
Annual repayments (+deposit)
Year 1 £2,922.32
Year 2 £2,422.32
Year 3 £2,422.32
Year 4 £2,422.32
Road tax
£0.00
£140.00
£140.00
£140.00
Insurance
£0.00
£816.64
£816.64
£816.64
MOT
£0.00
£0.00
£0.00
£55.00
Servicing & Maintenance
£0.00
£150.00
£165.00
£190.00
Tyres (£60 per tyre)
£0.00
£0.00
£120.00
£120.00
Contingency (work required)
£0.00
£0.00
£120.00
£120.00
Breakdown cover
£0.00
£70.00
£70.00
£70.00

 

IMPORTANT INFORMATION

Finance is subject to status and only available from age 18.
If you are 17 or not eligible for finance, an application can be made by a parent or guardian. Free insurance available in majority of UK postcodes. Where free insurance is unavailable, we will provide a contribution to the cost of your insurance in
most cases. Your new car will be covered through Marmalade with a discreet black box. Repeated unsafe driving could lead to you being charged an extra premium during your first year, but 9 out of 10 drivers never have that problem. Young Marmalade
Ltd of PE3 8AF acting as a credit broker and not a lender, will introduce you to one of a number of lenders that we work with to arrange vehicle finance for you.

Cars for Young Drivers→

Check out our range of brand new cars and finance offers to suit you!

Holly West-Robinson profile

By Holly West-Robinson

'Hi I'm Holly and I'm a young driver based in Peterborough! I love tattoos, food, drawing and anything art related, enjoy hanging out with friends and family and making a fool of myself. I'm definitely one of the adventurous types who's always up for a good old road trip!'  See more posts by Holly

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