Your essential checklist for buying a new car
Got your eye on a '62' reg-plate when September arrives? Or are you getting ready to snap up a second-hand bargain when others trade in and trade up?
Either way, there are a number of tactics you can use to make sure you get a good deal – not only on the car but also those costly extras such as insurance and road tax. Here's our checklist
Get the car you need...
It might sound obvious, but make sure you get the right car for your needs. There's a blizzard of car ads around at the moment, and they're produced by people who are paid lots of money to make their particular model look like the best thing on four wheels.
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Ignore the hype and drill down to the detail of running costs, fuel consumption, performance, seating configuration, boot capacity and built-in extras such as digital radio and sat-nav... the kind of things that will really make a difference when you're on the school run, navigating around the supermarket carpark or cruising down the motorway.
Check the costs
How much insurance and road tax you pay will be determined by the car you drive. Cars are divided by motor insurers into 50 groups (there are 20 for motorbikes and another 20 for vans) according to factors such as their performance, security, value and cost of repair.
The higher the group a car is in, the more it will cost to insure. You can find the details at http://www.thatcham.org/ – all you need is the name of the manufacturer and model.
When you buy your cover, be sure to use a premium price comparison service such as MoneySupermarket's car insurance channel. Research shows that 30% of people can save around £400 on the cost of their cover, with many more also saving hefty amounts each year.
When it comes to road tax, the amount you pay depends on whether or not it is a new car, when it was registered, the fuel type and its CO2 emissions as measured in grams per kilometre driven (g/km). The details can be foundhere.
Each car is allocated to a charging band from A to M and the difference can be startling. For example, a petrol or diesel engine car registered since 2001 with emissions of 120 g/km would be in Band C and attract a road tax rate of just £30.
A petrol or diesel car in Band M pumping out over 255 g/km would be charged £475.
New cars pay a different rate in their first year of registration before reverting to the standard scheme. So if you buy new in September you can edge up to Band D (130 g/km) and pay no tax for the first 12 months (and £100 thereafter).
But in Band M, the petrol or diesel car would be hit for an eye-popping £1,030 in that first year.
Cars running on alternative fuel pay £10 less than the equivalent petrol or diesel car.
Shop around online
As well as visiting your local dealerships, you should harness the might of the internet in your quest for the best price on any given vehicle.
There are a number of online car brokers who buy in bulk from manufacturers and pass the savings on – although your choice of make and model might be restricted, and you'll have to wait for the car to be delivered.
Buying online probably won't work if you're looking to trade in your current vehicle as these brokers tend only to want to sell.
Trade in, trade up
Talking of trading in second-hand vehicles, always be ready to do a quick bit of arithmetic to subtract what you're offered and the cost of the new car so you know the true price. It could be that you're only getting what seems like a high price for your old car because you're being charged at the top end of the market for the new one.
Scrutinise added extras
Many new cars come with a year or more's "free" insurance thrown in. It's not free, of course – the premium is factored into the overall price.
But if you take the package because you're getting a good deal on the car you really want, at least make sure you shop around when it comes to renewal – there's a good chance you could save a hefty amount.
If the dealer offers to quote for your car cover, bear in mind that prices are usually much steeper than you would pay if you scoured the market through MoneySupermarket.
You might also be offered gap insurance by the dealer. This comes into play if a new car is written-off, plugging the gap between the insurance pay-out and the initial cost of the vehicle.
Again, the commission earned by the dealer on the sale can bump up the premium, so it's well worth checking what you would pay by going direct to MoneySupermarket's partner helpucover.co.uk
Tough economic times such as these give consumers the whip hand, so it is worth haggling.This can be intimidating, especially as sales staff are trained to deter and deflect such tactics, and they may have already allowed a little wriggle room in the price on the windscreen to allow themselves to appear flexible and generous.
But if you can persevere, you could save a decent whack. I needed a bigger car a few years back (baby buggy, car seat, you know the deal) so after poking around on the internet to identify my preferred model, I headed off to a local dealer, who wanted £17,500 but eventually accepted £15,000 – a saving of over 14%.
(I'd like to take the credit, but I'd have meekly paid the list price and driven off feeling hugely inadequate. Luckily my better half was with me, and she takes no prisoners.)
Hold off for a month or two?
New registrations attract car-buyers like honey attracts bees. According to the Society of Motor Manufacturers and Traders, there were 332,000 new registrations in September 2011 and 372,000 last March.
In the months in between, the figures tumble to an average of 160,000. Amid the new plate-buying hordes, dealers are under less pressure to reduce their prices.
Car sales tend to dip dramatically in the run-up to Christmas – there were fewer than 120,000 new registrations last December – but dealers still have targets to meet and sales staff will be hungry for any commission they can muster.
If you can bide your time for a couple of months or so, you could therefore give yourself more negotiating firepower.
Of course, if you're buying new, waiting will mean you'll have your shiny '62' plate for a shorter time before the '13' registrations hit the streets in March next year.
But if you're saving a few hundred or even a few thousand pounds, it might be a price worth paying.
As with any insurance you're offered, cast a cold eye over any finance deal proffered by the deal, at least until you've had time to check what's available in the broader loans market.
Even if there's a 0% loan on the table, you might be able to reduce the cost price by paying cash up front. If the interest you pay on the loan you use to fund the purchase is less than the amount you've saved by paying cash, you're ahead in the deal.
It's a good time to borrow, with personal loan rates starting below 6% borrowing between £7,500 and £15,000. Check out what's on offer at MoneySupermarket's loans channel.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.