Buying a brand new car is likely to be one of the largest single expenses a person will ever make, with the average new small car costing around £15,000 a number which then rises to £24,000 for the average SUV. What’s more, did you know that a brand new car actually loses value the moment you drive it off the forecourt? That’s right a new car will depreciate by up to 35% in its first year and will continue to depreciate year on year after that. So what are the alternatives for those of us that still need access to a car?
- Buy a used car
Perhaps the most obvious alternative to buying a brand new car is buying a used one. We already know that a brand new car will depreciate significantly in its first and second year of use and so purchasing a car that is a year or two old can save you thousands whilst still giving you access to a fairly new vehicle. But even purchasing a used car can be a significant expense, thankfully there are ways to make it more affordable such as by taking out used car finance which will enable you to split the payment into more manageable chunks.
- Use a car-sharing service
Car sharing is rapidly growing in popularity, providing people who do not want to own a permanent vehicle with the ability to access one when they need it. Although a similar service to traditional car rental, car-sharing services allow users to rent vehicles for short periods of time, such as an hour or two, and the vehicles are parked in reserved spaces around town meaning that they can be accessed and leased outside of traditional business hours.
- Lease a car
Another alternative to buying a brand new car is to lease one. Leasing instead of buying your car will give you access to a new car for a period of time, usually a few years, without actually owning it. When your lease period is up, you can simply return the car to the dealership and lease a new one, essentially providing you with a regular vehicle upgrade. Of course, leasing a car is not without its costs and you will never own a vehicle, however, after a small downpayment, your subsequent lease repayments are often far less than they would be if you were paying back a loan on the car.
- Use a rideshare service
For those who don’t want to commit to a monthly fee then a ridesharing service is a great alternative. Services such as Lyft and Uber are like a friend with a car, whenever you need one, and what’s more, you don’t need to be able to drive. Choose from a private journey or reduce the cost and share one with other passengers. A ridesharing service is going to be expensive if you regularly need to make car journeys but for the infrequent car user they work out much cheaper than paying a monthly repayment for a car you hardly use.
This is a collaborative post.