Buying a Car

Your first car

Introduction Whether you have passed your test or are still learning to drive, you may have started thinking about buying your own car. But before you rush off and buy the local ‘classifieds’, make sure that have thought the following factors through carefully. They will help you find the car best suited to you – at the best price. · Cost How much are you willing to spend on your new car? Be realistic about what you can afford to pay for the car initially, and how much you can afford to keep it on the road. Regular tax, MOT and servicing, as well as fuel can all add up. · Make/Model Make a shortlist of cars that you like the look of. Again, be realistic – check how much you can afford and work within your price range. Did you know that 70% of cars are purchased because of their looks alone! · Insurance It is important that you check out the cost of insuring your short listed cars. As a general rule, the higher the performance or more specialist the car is, the more costly the insurance is likely to be. Young people – especially young men – pay high premiums. Some insurance companies, for instance, won’t even consider young, inexperienced drivers with powerful cars. But the good news is that provided you don’t have accidents or collect driving convictions, the premiums fall quickly and include a ‘no-claims bonus’. Shop around for the best insurance deals or go to a major broker who can do the searching for you. If you buy on-line you may get a discount. Never risk driving a car uninsured – this is a serious offence with serious consequences if you are caught or have an accident and injure someone. · Reviews Once you have made your shortlist, read about your chosen models in reviews in car magazines and on websites. Make sure you get the best for your money. You may even want to consider how the car has done in crash testing. EuroNCAP, have a list of cars and their test results on their website. You could also go to an online search facility such as the AA Car Buyer’s Guide at www.theAA.com . This is free and has a host of environmental, economic, EuroNCAP, depreciation and reliability information as well as detailed model reviews to help you reach a decision on the cars that suit you best. · Use Consider what you’re going to use your car for. If you intend to use the car for short trips around town, you may want to purchase something with a smaller engine that is economical on miles per gallon and easy to park. · Extras Decide what extras you want before heading off to look at the cars you like. That way, you will be less likely to fall for any clever sales pitches selling you extras that you can’t afford. Once you’ve made your shortlist, decided how much you want to spend and checked out the reviews, it’s time to go and buy your first car. · Buying from a showroom Showrooms can look daunting at first. They are big, brightly lit buildings, filled with shiny cars, and people in suits. However, once you start talking to the sales team, you’ll find you feel a little more comfortable. It’s helpful if you’ve done your research in advance. Remember the following tips when dealing with a car salesperson: · You are the customer As good as the offers may be, don’t be forced into anything if you’re not interested. The salesperson is going to offer you a lot of choices – it’s his or her job to sell cars, after all. Make sure that no matter how hard he or she persists, you remain in control. · Know your price Always make sure you’re getting the best price possible. A good way to ensure you’re getting a decent price is to look at the target price, published in What Car? magazine. Make sure you shop around - cars will vary in price at different showrooms. Be prepared to haggle – if the sales person thinks you might go elsewhere, they may protest but will probably drop the price anyway! · Keep cool Remain as neutral and confident as possible when discussing a potential deal. Be friendly, but be assertive. Always stay in control of the deal until you sign along the dotted line and buy the car. · Payment You should have decided by what means you’re actually going to pay for the car, be it cash, through a third party loan or the company’s finance. (See our resource, entitled Finance to help you decide on how to pay for your first car). A dealer may try and sell you the company finance scheme, as they are almost certain to make extra profit from it. Finance from car dealers is usually more expensive than anywhere else, so if you’re not going to be paying for the car in that way, let them know. It is worth shopping around for the best finance deals – there are many organisations offering personal loans with very low interest rates – often much lower than high street banks. Look in the personal finance pages of newspapers for ‘best buys’ or buy a specialist magazine such as Moneyfacts. · If you have a better offer, let them know If you have seen a cheaper deal in the showroom down the road, let the dealer know and see what they can offer you. · Don’t be put off by talk of the boss It’s almost certain that the dealer you’re talking to will consult his boss at some point in the deal. They’ll go off, negotiate a price with the management and come back to see what you think of it. This is a sign that you’re moving in the right direction – they may be discussing a lower price. · Finalise the deal when you are 100 per cent happy Don’t sign along the dotted line unless you’re absolutely happy with the deal you’ve negotiated. If it’s still not good enough for you, don’t agree to buy the car. There’s always another showroom, or even another method of purchase (see below). Be realistic with your negotiations and only sign the papers when you’re ultimately sure about the deal. ·Cheaper showroom alternatives If you’re on a lower budget, there are alternatives you can consider at the showroom. Not every car they have for show is brand new, and you’ll find plenty of bargains around if that new dream car of yours is out of your price league. · Ex-demonstration Ex-demonstration cars are the ones that have been sitting in the salesroom or on the road for test-drives for around three months and are decommissioned and sold-off at a discount price. You have probably sat in one when being shown models in a showroom. · Pre-registration A pre-registration car is previously registered under a dealer’s name, so you will appear as the second owner in the V5 logbook, directly under the dealer. You have to be prepared to take the car as it is in the showroom – there’s no choice of colour or fancy parts. Other than that, you’re effectively buying a brand new car. ·Buying a used car If you simply don’t have the cash to purchase a new car then a second-hand car may be your best alternative. There are many dealers out there that specialise in selling second-hand cars of varying registration dates. The same rules apply when buying a second-hand car from a used-car dealer – make sure you do your homework and get a fair price. Or go to a resource such as the AA car buyer’s guide on www.theAA.com, which includes free reviews and information on cars as old as eight years. The car should also be thoroughly checked. The car should have been through a service and an MOT and been cleaned thoroughly inside and out so it looks like a new car again. If you’re planning on buying a used car from an advert in the local paper then make sure to read the ‘Car History Checking’ resource on this website, where we talk you through making sure the car is legal and in working order. You can get a car data check carried out by an independent authority like the AA. This will show the car’s history, whether it has had major modifications (such as a new engine), ever been written off and if it is subject to outstanding finance – which you could become liable for. The main motoring organisations also offer car inspections which will highlight faults or problems which the seller may or may not know about. They will certainly identify serious problems and whether the car is a potential danger. The report may also help you to negotiate a lower price or ensure that proper repairs are carried out. Some dealers offer cars which have already had these inspections carried out. Other ways to buy your first car There are other alternatives that can work out cheaper, although many do come with certain risks: · Buying privately The most attractive prospect of buying privately is the price – the person selling the car doesn’t have overheads and therefore can afford to let the car go for a cheaper price. Of course, with the attractive price come a few greater risks that you wouldn’t necessarily have to worry about when buying from an approved dealership. In rare cases, sellers may try to offload stolen or written-off cars. Whenever buying from a private dealer, you should always do your homework and check that the people you’re dealing with, as well as the car you’re planning to buy, are completely suitable. Buying privately can be a great way to purchase a new car and save some money but you should be aware of the risks. Never agree to meet the seller at a neutral address, meet them at their home and make sure the registration documents line up with the address. Don't trust to mobile phone numbers, make sure you get a landline number. Remember that cars sold privately are often ‘sold as seen’, so you won’t have many legal rights if you purchase a faulty car. You won’t receive a warranty with the car either, so make sure that the car has been checked before making the purchase. · Auctions Buying a car from auction is a great way of getting a good, cheap price. But you take certain risks. There’s no opportunity to take the car for a test drive, for example. If you’re inexperienced in this field, make sure you take someone along with you who knows what they’re doing – you really don’t want to start making purchases with little or no clue about the proceedings. · Supermarkets The latest new trend in purchasing a new car, supermarkets offer a range of cars for competitive prices and you can purchase new and used cars here. They tend to stock basic models without the extras and options, so if you’ve got your heart set on a car with climatic air-conditioning and a six-CD multi-changer, it’s highly unlikely you’ll find it here. You’ll be unlikely to receive the level of after-sales service you’ll benefit from a dealer here, although it is more than you’ll get from buying privately or at an auction. · Brokers Brokers work as a link between you and the dealer. They are there to do all of the hard work for you and get you the best deal available. Purchasing from a broker can be very rewarding and little hassle. You’ll pay the broker for the car and his ‘fee’ for going through the sale for you. Even with the extra fee, the price of the car will likely result in being cheaper than purchasing from a dealer. There are no test drives available when purchasing from a broker, so it would be worth visiting a local dealership and asking for a test drive before confirming your choice of car. There’s always a chance that your car will be imported from mainland Europe when purchasing from a broker. Indeed some brokers specialise in helping you buy a car from Europe and arrange registration and other formalities after it has been imported. Make sure that the model you’ve purchased conforms to the full UK specification for that car. While imported cars aren’t likely to cause any bother and can usually be supplied with right-hand drive they tend to be lower in value.