It's a debate that splits opinion amongst motorists: is it more cost-effective to buy a new car or a second-hand one? Owning a brand-new vehicle is a great experience, but is it really worth the money?

Why a new car might be a good idea

A brand-new car, straight out of the showroom, will obviously have no wear-and-tear, while an older car will. That's not to say a new car can't break down, but it's probably a lot less likely to happen than with a car that's five or ten years old.

Many car manufacturers also offer inclusive warranties with new cars – sometimes for as long as five years – that could greatly reduce the cost to you if anything does go wrong.

Then there's road tax. Car manufacturers are constantly finding ways of improving the fuel efficiency and carbon emissions of their vehicles, and the government rewards drivers of 'greener' cars with cheaper tax. Newer cars are often far more efficient than the same models a few years ago.

Finally, you'll know the history of a new car – or to be more precise, you'll know it doesn't have one. A second-hand car may have had several owners, and sometimes it can be difficult to find out if there have been any problems with it.

Why a second-hand car could be a better idea

Most people have heard the old adage that a car loses half its value as soon as it leaves the showroom; this isn't strictly true, but it's not that far off. A nearly-new car will often be in just as good condition as a brand-new car, yet it could cost you thousands of pounds less.

This reduced cost means that you won't need to borrow as much to buy the car (if you're buying on credit) – and less debt means less risk of trouble with repayments.

If you're willing to go older than nearly-new, you could save even more money. And this is likely to lessen the financial pain of any problems you do encounter with your car, even if it does make it more likely that something will go wrong.

The overall costs of owning a second-hand car are likely to be lower than a new car over the years, especially considering that new cars have problems too (and they're not new cars forever!). If you have the money and it makes you happy, by all means buy new, but those concerned about getting the most out of their finances should probably go second-hand.

Article from Think Insure – information on car insurance in the UK.