Buying a New Car

The Argument Against New Cars:

1) You lose vast amounts of money (up to 50% in the first year)

Top Tips for Buying a New Car

Let’s say you’ve decided to go down the new-car route. You’ve decided what car you want, and spent hours selecting all the options from the (usually extensive and expensive) list. You’re all revved-up and itching to get down to the dealership for that complementary latte. But there’s one final check-list we want you to complete before you tick the box:

1) Have you phoned around and made sure you’re getting the best price? There are lots of dealers out there and they all want your money. One of them might even have a car just like the one you want in stock, sitting in the showroom, waiting to go. They’ll want to shift that one quickly because it’s been paid for so you’re more likely to get a good deal, even if the spec is slightly different to your perfect car.

2) Have you checked three really mundane things: depreciation, insurance and reliability? It’s easy to do – just look in the back of some of the car mags where they list things like this. The Top Gear JD Power survey does the reliability and owner-satisfaction research. Insurance can be crippling, but some manufacturers throw in free insurance and this can save a bundle. Depreciation is the real killer though. We’d avoid buying a new car that depreciates much more than it’s rivals over the time you plan to keep it. Do some simple sums and prepare to change your mind about your dream car! And what’s the point in buying a car that’s proven to be unreliable? Most modern cars are great these days, but some are greater than others. Japanese manufacturers clearly have a different outlook on life to the French ones!

3) Beware the Special Edition! If a car is being sold as a special edition at a special price there’s usually a good reason – they can’t shift the ordinary ones. Doesn’t make it a bad car, but it’s often a sign of a run-out model (there’s a whole new car being launched Thursday week and you’ll look pretty silly then won’t you?). The same applies to offers of free insurance, free servicing, 0% finance and all the rest. Don’t avoid these deals completely, but do go into them open-eyed. Do your research. Ask us first, or buy a weekly magazine (Autocar or Auto Express for instance) to keep yourself in the picture. If you’re clever you can catch a bargain because the same works in reverse – if you have the knowledge you’ll know there’s a new so-and-so coming out in two months and the dealers will urgently want to shift their old stock.

4) Get a discount. Not always on offer, but you’ll get something off 99% of the time. Dealer incentives work in mysterious ways so even if they can’t take money off the actual car you might be able to get something else thrown in, or a better trade-in. Mostly though, just go for the discount and don’t take no for an answer. Just walk out – it’s amazing how that works.

5) Don’t get stung on a trade-in. If you have to trade in your old car, the dealer will give you absolutely rock-bottom money for it. It’s not their fault really, because they’re not going to sell it themselves, they’re just going to unload it to a car auction house who’ll want to make their money as well. Getting a good price for a trade-in a the same as getting a discount off the purchase price. The answer is to know what your car is worth (look at the Autotrader website and that’ll give you a very good idea, or ask us) before you arrive at the dealership. And work out what you reckon it’s worth for you not having to sell your own car. It’s easy to sell a car, but it’s obviously a trudge so that may be worth a lot of your money!

A Quick Word on Finance

Of course paying for your car, either new or used, is the downside of all this frivolity. There are lots of options for new cars, from the simple bank loan to complicated dealer financing offers. The most common of the latter is the Personal Lease (every manufacturer calls it something different, but essentially they’re all the same) whereby you’re paying for the car’s depreciation and get a new one every two or three years. Less complicated than it sounds, you pay the dealer a deposit and agree and monthly payment which is lower than it would need to be to pay off the balance of the loan. But, this is where the clever bit comes in…

When you go back three years later there’s still money owing on the car, but that’s not a problem because the dealer takes the old car off you, pays back the remainder of the loan with what he can sell it for (its residual value) and uses what’s left over as a deposit on your next car. It means you can have a new car for relatively low monthly payments every two or three years without having to worry about selling the old one. The downside is you’re locked into that manufacturer, but some people only every drive one make of car. Do check APR rates, as ever.

Don’t discount these schemes completely because they sound complicated. The original idea came from the States and some are very good, allowing you to drive the car you want with the finances available.

Ultimate flexibility is obviously gained by arranging your own finance, and there are always some great offers out there for personal loans, so please please please do a search on the internet before getting a loan from your old faithful bank – it could save you thousands!

Don’t Forget

We’re always here at Women and Wheels, so if you have any problems or questions just drop us a line and we’ll try our best to help.