For a lucky few people, choosing a car is all about style, colour, make and horsepower.  They want a car that looks great and drives even better than it looks.

For the rest of us, looking for a new car involves the following priorities:

  • Cost;
  • Fuel economy;
  • Road tax band;
  • Car insurance quotes;
  • Reliability of a particular make or model (and likelihood of expensive repair bills).

Anything else, including things like whether it will fit up the drive and how many seats it has (and what colour it is) almost falls by the wayside.  Now more than ever before, buying a car is a major expenditure and not just in terms of the initial outlay – now, the running costs including car insurance, road tax and fuel costs are a major consideration in deciding whether or not to buy a particular car.

Diesel cars typically get better mileage that is not negated by the slightly more expensive price of the fuel.  Better still in terms of value per mile are the hybrid or electric cars, though the latter tend to have expensive price tags and are somewhat lacking in style for many people to consider them.  That may be changing, though, as more money is invested in the creation of these environmentally-friendly vehicles as demand for cars that are cheaper to run increases.

The most sought-after cars for the time being are small cars that have good miles-per-gallon ratings that are under three years old (so don't need MOTs).  However, since fewer people are buying cars at the moment due to the economic downturn, fewer such cars are being made and so demand is greater than supply, leading to a higher asking price for such cars.

Instead, people are turning in droves to cars that are older than 10 years.  These are far cheaper to buy, and people are offsetting the cost of running their cars against that cheaper price tag.  The price of a new car or used car under 3 years has increased by around 6% over the last couple of years, whilst the price of used cars over 10 years old has continued to fall, making them an attractive prospect.

The cost of repairing and maintaining a car is, after all, perhaps the least expensive of the three ‘big' expenses (MOT, road tax and insurance) or at least it can be if general care is taken to do things like check tyre pressure and tracking and change the oil.  Doing this and getting a clean MOT is much cheaper than the extra cost of buying a newer car.

Car insurance for these older cars can be much lower too, as the likelihood of them being targeted for theft is often lower.

Older cars also depreciate at a lower rate than new ones, so they hold their value better.  However, fuel efficiency is far better in newer cars than older cars, so if you opt for an older car to make savings on insurance and the initial outlay, you should expect to pay more at the pump, more often.