Whether you’re buying new or used in 2018, you’ll want to ensure you get the best deal. Here are some ideas that you may find helpful.
Buy or lease?
Three quarters of new cars in the UK are currently bought on finance, but what is the better option for you? First, the obvious. If you have spare capital and a low income, it makes send to buy outright. And conversely, if you are low on spare capital but have a decent income, then it would make more sense to lease. Some people would never consider buying a new car outright because of the immediate depreciation in value. Others would never consider leasing because of hidden charges, extra interest payments, restrictions on mileage.
The two common ways of financing a car via a personal car lease are personal contract hire (PCH) and personal contract purchase (PCP). PCH leasing allows you to drive a new car every three, say, with low monthly payments and no concerns about the car’s resale value. PCP is similar, but you have the option of buying the car at the end of the agreement. However, in both cases there are strict rules and restrictions. Here is an excellent guide to car leasing covering all the issues.
Despite the numbers of new cars being bought on finance, it often makes sense to buy outright and only spend what you can afford. Ask yourself, do you really need a new car when a one or two-year-old car would do just as well. Consider the depreciation. On average, a new car loses almost half it’s value after three years. What Car? produce some very useful stats on car depreciation showing which cars hold their value. This must be a key consideration when buying outright. Before you start your search for a car, think seriously and honestly about what you need. For instance, do I need a big car or would a smaller one suffice. Petrol or diesel? Diesel cars used to be popular, but this trend is changing now, air pollution becoming the main issue. What are the cheapest cars to run? Obviously, small engines can be cheaper, petrol not diesel, manual not automatic, low CO2 emissions mean lower vehicle excise duty, smaller cars are cheaper to insure.
When’s the best time?
Just like in life, timing is everything in car-buying — and buying a car at the right time could be the difference between saving hundreds, or even thousands on your next vehicle purchase.
Buy at the end of the month or quarter – it’s a time when the dealership salesmen are eager to complete their sales quota. They may be just short of hitting their monthly target resulting in a bonus. So, don’t be shy about making an offer at the end of the month. Buy a convertible in the winter – obvious isn’t it. You could consider buying an old model when the new model launches – the old model will be reduced in price and dealerships want to make room for the new models.
Always haggle to get a better deal. Be prepared to walk away, let them chase you for your business. Dealers make a lot of money from manufacturers.
If you are buying outright, pay a small deposit on a credit card which gives you protection under Section 75 of the Consumers Credit Act.
Always buy at the end of the month or quarter when dealerships are keen to complete sales quotas. Don’t get hung up about waiting for the new registration – it’s not as important as it used to be, when plates changed once a year.
If you have decided to lease, read the small print thoroughly and work out exactly what you will pay over the term of the agreement. Shop around for best deals.
Make sure you are buying the right car for your needs and be honest with yourself.
Manual gear boxes and petrol engines driven properly will save you money.
If you have a car to sell, take the time to do a private sale. This will be more hassle but you will get a higher price than a part exchange.
Buying or leasing, don’t be tempted to commit to more than you can afford.