Eight things to consider before you buy a car
Narrow down your options
Answering these basic questions should help you make the right choices
- Do you mainly transport adults, children, loads of stuff, or all three?
- Diesel, petrol or alternative fuel?
- Long or short journeys?
- Automatic or manual?
- Small engine for town or larger engine for motorways?
- How many doors – two, three, four, five?
Consider the Vehicle Excise
DutyPetrol and diesel cars emitting less than 100g/kg of carbon dioxide pay no duty at all but those with emissions of 226g/kg or more pay £400 a year, with that sum likely to rise year-on-year.If you're keen on two models and everything else is equal after a test drive, you might think that the one with the lower emissions will save you money – but that's not necessarily the case. High emission cars are becoming so unpopular that they might make a better second-hand buy, despite the tax.
Think about depreciation
Depreciation in the first year can range from more than 40 per cent on some popular models to around 12 per cent on others. Over three years, according to Which?, the value can drop between 50 and 77 per cent.Recently, high emission cars have been losing even more because of excise duty. If you're buying a big second-hand car, you could pick up a bargain – if you can afford the tax and higher fuel bills.If you're buying new, unless you intend to keep your car for many years, it could be worth paying a bit more up front for a model with low depreciation in order to get considerably more back in a couple of years' time. Car magazines, specialist websites and dealers' guides can help you to decide.See what you can afford
If you're going to use credit to buy your car, start by checking your credit report which will give you a snapshot of current borrowings and how well you're managing and a good idea of how much you can borrow.
It will also show what lenders see when you apply for a car loan – they use information from your credit report as well as your application form when they decide whether to make an offer and how much interest to charge.
A good credit report showing that you make repayments on time and have not stretched yourself to the limit will make it easier for you to get the deals you want. A single administrative error might add thousands to your car finance bill through higher interest rates – or even result in credit being refused.
Find the right finance
Hundreds of thousands of cars every year are bought on car dealer finance. It's the simple route but it can be expensive, with an average interest rate of upwards of ten per cent. Search the price comparison websites and you could take four per cent off that.
Make sure that lenders understand you only want information when you make enquiries. If they think you're actually applying for credit, they'll leave the record of a credit search on your credit report. Lots of these can make other lenders suspicious – they may think you're desperate for money or even that a fraud is taking place.
Get ready to haggle
Some manufacturers have large numbers of specific models they want to sell, while dealers may have sales targets to meet. Either can get you an instant discount. It's also worth checking magazines and the internet to find the lowest prices for the car you want. You may not want to travel across the country to get a reduction but if you show your local dealer that you can buy the car for less, you are more likely to get a good deal close to home.If you're desperate for a brand new car and strapped for cash, you may want to investigate manufacturers' special offers, such as 0 per cent finance, free insurance, free servicing and extended warranties – but remember that these almost always have a hidden price, as you may have to pay more in the long run than you would if you shopped around. Some used car dealers are also putting on special offers.Remember, you don't have to buy anything, so keep your nerve and negotiate. If you're not happy with the final price, walk away – there are lots of other bargains out there.
Check the car's history
One in three used cars has something to hide, so it's important to check the car's history. The biggest issue facing used car buyers is outstanding finance and in recent months there has been a significant increase in the number of people trying to sell their cars without settling the finance first. To protect yourself against this and any other form of vehicle identity fraud, take a look at the buying advice at www.AutoCheck.co.uk and run an online report.It can tell you instantly whether the car you are looking at is on finance, stolen or has been written off by an insurance company in the UK. You can also see whether the vehicle has had any plate changes, if there are mileage anomalies and how many keepers have been recorded.