Car-buying tips

Looking for a new or second-hand car?

There’s a lot to consider when buying your next car. To make things a little easier, Jim Holder from What Car? shares 6 tips.

1. Buy at the right time

Some people plan their car purchases around plate changes, which take place in March and September. This may work for some, says Jim, but it depends on how much pressure is on the dealership to shift their stock.

‘As an overview, I would say that dealers are generally more willing to negotiate on price at the end of the month and the end of every quarter.’

2. Choose your fuel carefully

Depending on how far and often you drive, fuel types can be a big deciding factor. ‘If you drive less than 8,000 miles a year, then petrol is probably more suitable for you’ says Jim. Whereas diesel cars are typically the most popular option for drivers who use their car regularly – to drive to work, or to travel long distances for instance. Jim believes ‘The more miles you drive, the more likely diesel will prove most economical.’

However, he warns that there might be tough times ahead for diesel drivers. ‘There appears to be a wish by regulators to cut back on the popularity of diesel cars’ – and he predicts that city centres may start banning diesel cars at some point in the future.

If you’re seeking a greener model and rarely cover long distances in a single journey, hybrids might be a wise choice. They can usually travel 30 to 40 miles on a single charge (although it varies depending on the model) and an extra 200 to 300 miles on petrol or diesel. If you tend to cover short distances only – say a maximum of 60 to 80 miles at a time – a purely electric car might work for you.

When considering what type of car you want to buy, you may also want to factor in depreciation. ‘The resale values of some electric cars at the moment are dreadful,’ says Jim. ‘This is partly because the technology is moving fast, leaving older cars behind in terms of capability and therefore desirability, and also because consumer confidence in the technology is still low.’

Diesel vehicles tend to be more expensive to buy, but currently tend to depreciate in value more slowly. But, if diesel continues to fall out of favour, this may well change.

The best option in terms of depreciation is a hybrid, according to Jim. Although hybrid cars have part-electric engines, the demand for these fuel-efficient ‘greener’ cars remains high, so they tend to maintain a higher price than their petrol and diesel equivalents when they’re resold.

Hybrid cars typically incur less tax, and are now available from a wide range of manufacturers, including luxury marques such as Mercedes and Lexus.

Many hybrid models also avoid congestion charges – if you drive in London, you can check TfL’s website for qualifying vehicles.  

3. Use expert insight

Take your price comparison to the next level by tapping into industry expertise. Jim suggests calling What Car?’s Target Price team to find out the maximum price you should pay for your car. The price they provide is based on research and information from mystery shoppers and industry insiders.

Parker’s Car Comparison Tool also lets you compare the pros and cons of up to 3 cars at a time, such as fuel economy, ride quality, or fixtures and fittings, taking you to the latest prices for each model.

4. Look out for pre-registration vehicles

Dealerships will often buy new cars themselves to meet sales quotas. Referred to as ‘pre-reg’, these cars are then offered for sale, 3 to 6 months later. You can get up to 30% off the list price, including top-of-the-range models – according to Jim.

Dealers are required to hold on to pre-reg cars for a set period of time, as a condition of purchase from the manufacturer. Jim cautions that some unscrupulous traders have been known to try and sell on pre-reg cars earlier, and hold on to the V5C registration document as ‘proof’ that it hasn’t been sold.

If this happens, not only will you be committing an offence by keeping and driving a car not registered to you, delays in receiving the V5C can also impact your insurance and the remainder of your warranty. ‘You should always have the V5C in your hand, or walk away from the deal,’ says Jim.

5. Consider buying from a car broker

Brokers typically have the lowest prices on all new and second-hand models, including luxury marques, but they might not have the exact model and spec you’re looking for – so it’s worth checking what’s available before committing.

‘I would definitely shop around on car broker sites,’ says Jim. ‘Because they don’t have dealerships, they have quite low overheads, so often pass on lower prices to the customer. You’ll still buy your car; you’ll still go to a dealership to collect it, but they essentially act as the middleman.’

What Car? suggests looking at sites such as Drive The Deal, Coast2Coast Cars and Autoebid.

Whether you’re buying from a broker or direct from a dealership, you can check the history of any car with the MyCarCheck app. Download the app for free from iTunes or Google Play to access basic vehicle details. Or get a full history check for a small price. 

6. Explore your finance options

The process of financing a car is much the same whether you’re upgrading the family runabout or buying a luxury performance car. It all depends on whether you’d prefer to make a large payment upfront, or pay with more manageable monthly instalments.

‘I always assumed that luxury cars were bought outright,’ admits Jim. ‘But they’re not. The leasing side of the premium market is growing all the time’ – partly because there are various options to finance your next car purchase. With a leasing agreement from a car dealer, for example, you put down a deposit and then make fixed monthly payments for a fixed term (typically 3 years). At the end, you have the option to pay a final ‘balloon payment’ to own the car, or you can use any residual value in the car as a deposit for a new one. Be aware though, that there are fees and charges if you want to exit the agreement before the end of the term, and you could incur additional charges for exceeding pre-agreed mileage limits. Administration fees may also apply, as well as extra charges if the car fails its final condition check. The interest rates charged could vary widely so be sure to check those too.

A personal loan from your bank could be more cost effective than dealer finance options. You have only one simple fixed monthly payment, and although you must repay the loan in full, you own your car outright from the start, giving you the flexibility to trade up and down whenever you want.

This article has been prepared by Barclays Bank PLC and is provided to you for information purposes only. Barclays accepts no liability whatsoever for any losses arising from the use of this document or reliance on the information contained herein. 

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