The depreciation curve
A new car loses ~15-25% in year one, another ~10-15% in year two, then depreciates more slowly. Buying at 2-3 years old means someone else has absorbed the steepest fall.
Where new wins in 2026
Manufacturer 0% APR PCP offers on select new models can undercut used finance on total cost of credit. Warranty, RAC/AA cover and known service history also reduce total ownership cost. If you're going to buy on PCP anyway, run new vs 2-year-old on the same term.
Where used still wins
Cars in the sweet spot (2-4 years old, main-dealer service history) usually beat new on total ownership cost. HP monthlies are typically £40-£80 lower for the same weekly usage.
The 3-year rule of thumb
If you plan to keep the car 5+ years, buying 2-3 years old maximises value. If you'll change every 2-3 years, a new PCP with an attractive manufacturer subsidy can occasionally win outright.
