The Ben Ish Chai (Rabbi Yosef Chaim of Baghdad, 1833-1909), in his work of responsa Torah Lishma (99), addresses the situation of a person who has two suits he can wear on Shabbat: a new suit that does not fit him properly – such as a suit that is too short – or an older suit that does fit. Which suit should he wear in honor of Shabbat?
The Ben Ish Chai finds the answer in the ruling of the Rambam (Rabbi Moshe Ben Maimon, Spain-Egypt, 1135-1204), in Hilchot Kelei Ha'mikdash (8:4), regarding a situation where the special garments of the Kohen Gadol (high priest) either did not fit him properly or had become worn out. The Rambam writes that if the Kohen Gadol's garments did not properly fit and he performed the Avoda (service in the Temple), the Avoda is invalid. If, however, he performed the Avoda while wearing worn-out Bigdei Kehuna (priestly garments) that fit him properly, then the service is valid and need not be repeated.
The Ben Ish Chai deduced from this ruling that old garments that fit properly are preferable to new garments that do not fit. Therefore, on Shabbat, too, it is preferable to wear an old suit that fits properly rather than a newer suit that does not fit.