Buying a used car can seem like a great deal at first glance. The initial purchase price is usually much lower than a brand-new model. However, there are other costs to factor in beyond just the sticker price. Calculating the true total cost of ownership is important to determine if a used car is really a good value. Follow these tips to fully understand the financial commitment of owning a pre-owned vehicle.

Research Average Maintenance and Repair Costs

Once a car has some miles behind it, maintenance and repair costs start to add up. Check industry guides to find the average annual maintenance and repair costs for the make and model you’re considering. This includes things like oil changes, new tyres, brakes, batteries and other regular service items. Be sure to factor in that repair costs typically increase as a vehicle ages and racks up more miles.

Account for Unexpected Repairs

On top of routine maintenance, unexpected repair bills are likely over the life of a used car. Things like the transmission, radiator, alternator and other systems can fail without warning. Look at consumer reliability ratings to see which cars tend to need fewer repairs. Also, consider leftovers of any existing warranties, which can help cover repair costs for a short period. Budgeting £500-£1,000 annually for unforeseen repairs is a good rule of thumb.

Calculate Insurance Costs

Insurance is almost always more expensive for used cars versus new, especially for vehicles over 8 years old. Get quotes from multiple insurers to see how much you’ll pay annually for comprehensive cover based on the car’s age, value, repair costs, safety ratings and your personal details. Look for ways to reduce your premiums, like opting for a higher voluntary excess.

When shopping for cars in your local area, such as used cars in Cornwall if you live in St Ives, research insurance costs for the models you’re interested in.

Factor in Depreciation

Used cars depreciate in value quickly in the first years after purchase. On average, a used car will lose 10-20% of its value each year. This means if you paid £10,000 for a used car, it might only be worth £8,000 a year later. Look up the typical depreciation rate for the make and model you want so you know how quickly it will decline in value over time.

Consider Fuel Efficiency

Used cars tend to be less fuel efficient than newer models. Check the claimed MPG of any car you’re looking at to estimate annual fuel costs based on your typical mileage. Remember, costs can add up quickly for models that drink a lot of fuel. Opting for a more efficient used car can save you money at the pumps.

Plan for Road Tax and MOT Costs

You’ll need to pay annual road tax to legally drive any used car in the UK. Road tax varies based on the car’s CO2 emissions. Check the DVLA listings to see how much you’ll owe each year. You’ll also need to factor in MOT costs once the car is 3 years old.

Weigh the Numbers Carefully

Buying a used car is more complicated than just the purchase price. Carefully researching and planning for additional ownership costs can prevent surprise bills down the road. Follow this guide to calculate the true total cost of any used car over time. Crunching the numbers in advance helps ensure you make the right financial decision.