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Stop overpaying on your car with accountant’s sweet spot ‘3-year rule’


A FINANCE expert has revealed the sweet spot rule that can help you save hundreds when buying a car.

Nischa, an Investment Banker, has shared how to avoid overpaying for a car on her YouTube channel.

Nischa is an investment banker who uploads videos on YouTube exploring personal finance and business


Nischa is an investment banker who uploads videos on YouTube exploring personal finance and businessCredit: You Tube /@nischa
She recommends buying a used car that is three to five years old


She recommends buying a used car that is three to five years oldCredit: You Tube /@nischa

The accountant explained that buying a new car instead of a used one is often “the less financially savvy option”.

New cars are considerably more expensive and typically depreciate in value, as soon as it’s driven out of the dealership.

“Statistics show that after the first 12 months, a new car can depreciate by around 15 to 35 per cent,” Nischa added.

Therefore, if you purchased a new motor for £10,000 by the end of the year the same car would be worth just £6,500.

As the vehicle gets older its value will continue to drop and will depreciate more than 50 per cent after three to four years.

However, the Investment banker added: “Buying a used car can save you a lot of money in the long run.”

Those looking to buy a used car should look for ones that are more than a couple of years old.

“The sweet spot for used cars is usually between three to five years old,” said Nischa.

In the video, she explained the reasoning is because at that point the car has lost a lot of its value, making it cheaper for you to buy.

The car will also depreciate slower after five years because so much of its original value has already been lost.

However, the downside of buying a used car is that it may need more maintenance and repairs which can add up.

It comes after a motoring expert revealed the red flags drivers should be aware of when buying a used car.


Pete Ridley, from Car Finance Saver, urged people to be more vigilant when looking for cars to avoid getting ripped off.

He said: “From targeted scams, to just not knowing what is a red flag, buyers need to know what to look for, what to avoid, and how to approach a sale when looking at buying a used car.”

It is important motirists take the car for a spin before handing over their hard earned cash.

However, he warned them not to just pop round the corner for just five minutes and to make sure they put it through a range of speeds and corners to test performance as much as possible.

Not only can this reveal any issues under the bonnet, it also gives a great idea of the feel of the car and the driving experience.

Another tip Pete gave was to meet the seller in public as it leaves you less vulnearble to a dodgy deal.

Always try to make a visit to the seller’s home or the place where it is being stored.

That way you can check that all the paperwork matches up with their address and get an idea of the conditions the vehicle has been kept in.

Five tips to get the best deal when buying a used car

According Wheeler Dealers star Marc Priestley

  1. Look beyond the mileage – even low-mileage cars can have problems, especially if they’ve been in storage
  2. Check the tiny details – something as small as the rubber seals around doors and windows can be vital
  3. Have a look underneath – watch out for rust and corrosion on the underside
  4. Inspect the boot – watch out for damp and leaking water
  5. Check the papers – service history, MOT history, registrations documents
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