Buying a new car may seem like a hassle for some people, especially when you are looking to buy your first brand new car. Just how do you get the best deal on a new car and what are some of the pitfalls to look out for?
Should you buy from a franchised dealer, through a broker or a car supermarket? Knowing exactly the car you are looking for before you go out to buy is one of the first steps you can take. This puts you in a better position because you can research prices across different marketplaces before committing to buy. This article will guide you through some of the key decisions you will need to make, as well as provide some tips for getting a great deal on exactly the car you want.
1. Be Clear on your Specifications
Knowing the exact specification you want for your new car makes it easier to shop around and budget – if you’re not so savvy with your auto language this guide from Ask Men helps to demystify the common terms . Comparing prices when you don’t know exactly what you want in your new car is next to impossible. Are you going to go for optional extra features or you are happy with the standard specification? Remember optional extras are an additional cost so be careful to budget for these too.
2. To Part-Exchange or Not?
Part-exchanging your old car when buying a new one is the most convenient way to dispose of your old vehicle, but is it the most economical? You may consider a part-exchange as a deal sweetener but from the point of view of the dealer, they have an upper hand when it comes to part-exchange (they are making a sale after all). Here is how you can get the most out of your old car:
- Before you consider part-exchange educate yourself on the market value of your car based on its condition, age and mileage. This information should give you a better bargaining position if you decide part-ex.
- If the market value of your car is significant then you are better off selling it privately and then using the cash as part of the new car purchase. Chances are you will never get as much in part-exchange. It also strengthens your negotiating position if you are not lumbered with an old car to get rid off. Remember car dealership want your business.
- Always watch out when dealers advertise a minimum trade-in offer. The small print will usually require you to obtain financing from the dealer to qualify.
3. Consider Financing
Whether you are buying a new car or an old car and whether you are part-exchanging or not. You will always need to think about how you will finance your purchase. If you are considering using car finance be sure to use a car finance calculator like the one found on the Stoneacre Financial Services site.
There are a number of variables which will determine how good your rate is on a car finance deal such as:
- Your credit rating – The better your credit rating the more likely you will be to accepted and the better rate you will receive
- The cost of the vehicle – The cheaper the vehicle, the lower your rate.
- The size of the deposit – A higher deposit will reduce how much you pay long term
- The length of your car finance contract – Shorter contracts are often much more cost effective than long contracts.
4. Choosing the Best Time to Go Car Shopping
When it comes to buying a new car, not all times of the month are equal. Car dealers and salespeople have sales targets to meet. End of month and end of quarter periods are high pressure times for the industry, especially if their numbers are not adding up.
Every sale really counts when they are just shy of meeting their sales targets and they will do almost anything to get that sale booked in. This is great news for you as you will be able to get the maximum discounts they can offer without losing money. However, remember you have to ask for a discount to receive one. Always, always haggle and keep within your budget.
5. Read the Small Print When it Comes to Warranty
Buying a new car is a big commitment and having an unexpected expense a few months down the line due to a manufacturing fault is best avoided. Familiarising yourself with the warranty conditions is essential if you are to avoid costly surprises. Things to be wary of include:
- Regular servicing to manufacturer’s specification and using approved parts to preserve the warranty.
- Diligent record keeping of maintenance activities to ensure they meet manufacturer’s requirements.
- Routine checks for anticorrosion are often required to preserve the long-term anti-corrosion warranty offered by most manufacturers.
Once you are happy with the terms and conditions of the warranty and you know you can abide by them, you are ready to sign the paperwork. If your agreement includes financing make sure you read the financing terms as well.
6. Ask for the Pre-Reg Stock and Save
Pre-registration is a practice common with many dealers. It allows them to maintain consistent order levels from the manufacturers, ensuring better deals and pricing hence profitability on their part.
The great thing for you is that pre-reg cars come heavily discounted. Dealers are keen to shift them as quickly as possible because once registered they are inventory, and inventory is money doing nothing.
Shop around the dealerships and ask if they have pre-reg vehicles meeting your specification. A few things to bear in mind about pre-reg vehicles are:
- You are technically the second registered owner of the car since it’s already registered.
- The warranty starts from the date of registration so you may not get the full manufacturer’s warranty when you buy the car.
- Another downside is that they usually comes as they are, you don’t have the option for personalisation or customisation.
If you decide to go for a pre-reg, remember the resale value is lower as depreciation has already started working against you. Also, the car will have two previous owners which may be a factor lowering the price further.
If you are on the market for a brand new car and not sure where the best place to start, this quick guide should give you a better idea of where to look. We have covered the need to “know” aspects of buying a new car including why a pre-reg vehicle could save you as much as 70%.
Always remember the vendor (whether dealership or car supermarket) needs your business and so you should haggle and negotiate the price lower.