Your new car depreciates whilst your credit rating deteriorates

Financial advisors are encouraging people to look at their monetary situation carefully before buying a shiny new car.

They have calculated that an "08" £15,000 car will lose around half its value in three years and borrowing the money to buy the car at 7.7 per cent interest totals £9,347.

For some people worrying about negative home equity and mortgage commitments, that could make the difference between repossession or renegotiating their loans.

Buying a used vehicle, even with slightly higher anticipated maintenance costs, may be the solution.

Mark Cornwall, of Car Parts Direct, said: "Cars are reliable for at least ten years providing they are serviced.

"Items such as brakes cost very little. Even the more expensive parts that could fail such as shock absorbers, drive shafts or a steering rack rarely cost more than a couple of hundred pounds – this is peanuts compared to financing a new vehicle."

Experian now produces information about CO2 emissions for used vehicles, as well as manufacturer readings for new vehicles being available, so green motorists should still be able to chose wisely.

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