How To Buy A New Car That You Can Afford for Youngsters

So you’ve past your driving test congratulations! and you have manged to save up some deposit  money for a new car, or just enough to get a secondhand ca with the help of family and weekend work over at your part-time job. Now where to start looking and what kind of car should you be looking for? Not to mention insurance. Well with the help of money saving experts here are a few things you should know before you sign on the dotted line.

straight from the factory line will cost you will ultimately depend on what car you get. Yet there are plenty of ways you can reduce the final bill.


First things first: Do you REALLY need a brand spanking new car?


Buying a new car is anything but MoneySaving. So ask yourself: does the car really need to be fresh off the production line?

On average, a new car loses almost half of its value in the first three years, and some lose their value even faster. That’s a massive whack to lose on such an expensive purchase. Even a car that’s one or two years old or an ex-demo car is typically far better value than a brand new one. For more info, see our 20 Tips When Buying a Used Car guide.

Here’s a flavour of just how much you could lose…

Top 10 cars that burn cash quickest
PEUGEOT ION 5dr Auto £33,100 £5,725 17.3%
CITROEN C ZERO 5dr Auto £33,100 £5,975 18.1%
MITSUBISHI I-MIEV 5dr Keiko Auto £29,990 £6,475 21.6%
AIXAM CROSSLINE GTR 3dr Auto £12,370 £3,500 28.3%
CITROEN C4 1.6 VTi VTR+ 5dr Auto £18,535 £5,650 30.5%
VAUXHALL ZAFIRA 1.7 CDTi ecoFLEX Design [110] 5dr £24,325 £7,425 30.5%
FIAT FIORINO 1.3 Multijet 95 Adventure 5dr [5 seat] Start Stop £16,892 £5,175 30.6%
MG MOTOR UK MG6 1.8T S 5dr £15,141 £4,750 31.4%
VAUXHALL CORSA 1.3 CDTi [95] ecoFLEX S 3dr [Start Stop] £14,285 £4,600 32.2%
CITROEN C4 1.6 VTi VTR+ 5dr £17,565 £5,700 32.5%
Source: Valuation data provider, March 2015

The models that hold their value

As mentioned in the point above, the biggest problem with buying a new car is that they lose their value so quickly. Not surprisingly then, the amount your car slumps in value over time is typically the single biggest cost, and hence a key consideration.

Some models shed cash quicker than others, meaning you’ll get a lot less when you come to sell it on. So check this out before hunting for a new model (especially if you plan to sell after a few years).

What Car? has a car depreciation calculator to see how much value a model will hold, plus its annual rate of depreciation. The top ten seem to change on a regular basis so do your research, but here’s a taster…

Top 10 car brands for holding their value
1 Land Rover 24%
2 Jeep 33%
3 Tesla 33%
4 Mercedes-Benz 35%
5 MINI 35%
6 Lexus 35%
7 Mitsubishi 35%
8 Audi 35%
9 Mazda 36%
10 Dacia 36%
Source: Car-valuation service Glass‘s, Sep 2015

The best time to buy a new car

Once you’ve decided what car to pick, now you need to know how to get the best deal. One way to slash costs is to buy at the right time.

Dealers have targets to meet, with bonuses up for grabs. Typically, these are based on quarterly sales, making the end of March, June, September and December a good time to buy. They need to shift cars, so will be more willing to negotiate and offer attractive finance packages.

For example, June 2015 turned out to be a great time to buy a car with loads of offers available, eg, Audi offering a deposit contribution of £5,000 on some of its A4 models.

For a quiet time, try to avoid weekends or the start of the month just after payday. A dealership crammed with wannabe buyers isn’t a good place to bargain hard, so it may also be worth avoiding new numberplate seasons too.

Think about the style of car, too. Summer’s when drivers dream of buying convertibles, making winter a good time to get a deal on one. Here are some tips from a broker and a dealer on when to buy to get the best deal…

Don’t leave it to the last day of the quarter, as once targets are met any deals will disappear.– Richard Sanders,, an online broker

All dealers work to three-monthly sales targets… Most of us try to hit target way before the end of the quarter, we did our best deals in Feb and early March and are now basically done for the quarter.– Forumite Saversammy, a dealer

‘What car do I need?’ checklist

Before you start browsing for the ‘one’, think about what you really NEED from a new car. There’s no point buying a two-seater convertible if you’re about to start a family, so work out what is realistic. Ask yourself:

  • What are my essential requirements? Fuel efficiency or enough room for all the family?
  • Do I need the car to do anything specific? This could include towing a trailer or fitting into a small space.
  • Is it for short city drives or longer motorway journeys? Does it need to be able to cruise at motorway speeds without straining?
  • What’s better, petrol or diesel? The fuel you want to use can make a big difference in the model you might choose.
  • Do I need a massive boot? Consider whether you need room for things such as sports equipment or a pushchair – or if you need to fit friendly Fido or your meddling mother-in-law.
  • Do I want to consider an eco-friendly car? If so, a hybrid or electric car could be an option. The cost more to start with but some come with Government grants, eg, the BMW i3 has a £4,500 grant.

Draw up a list of essential requirements and go from there.

To print this checklist, click here:DOWNLOAD PDF (403KB)

Revealed: The cheapest cars to run

To save you time and energy trying to work this out, car experts have already done this research. You can compare running costs of different models, including the ones you’re looking to buy, on several sites, including Parkers and What Car?. But, follow these rules to home in on the cheapest cars:

    • Smaller engines can be cheaper. The choice of a 1.0-litre or a 2.0-litre engine isn’t just about pure horsepower. A large engine will usually burn more fuel than a smaller one. So engine size is a vital consideration if fuel economy is an important factor in your decision.

      Of course, this depends on how you use the car. A small engine is most efficient when it’s used as intended, such as to pootle around town. If a small engine is used a high speed, it’ll need to work much harder to keep the car moving – burning more fuel.

    • Petrol cars tend to be cheaper than diesel. Diesel engines are often more economical than their petrol counterparts. But don’t be fooled into thinking this definitely makes diesel a better option. These cars are more expensive, and they usually cost more at the pump than petrol. We’ve looked at this more closely below.
    • Manual cars are cheaper than automatic. Switching between gears is extra work – particularly to those of us prone to stalling at traffic lights. Yet while automatics take some of the hassle out of driving, they come with a higher price tag.

      A manual Audi A3 diesel hatchback, for example, costs £20,801. This compares to the automatic version, at £22,290 – or a rise of £1,489. Yet many automatics are more fuel-efficient than their manual counterparts, as they ‘know’ the best gear to be in, so you could recoup the extra cost over time.

    • Hybrid cars are cheap to run, but cost more to buy. Technology is improving everyday with modern hybrids coming in all shapes and sizes, from superminis to luxury SUVs. Fuel-economy and cheap or even zero tax rates make part-electric models appealing, like the Toyota Prius. They also tend to hold their value for resale.

      But they usually cost more to buy – so weigh up the savings.

    • Check its CO2 emissions, as they affect the duty you pay. Buyers of the most polluting cars pay the most road tax.

      Apart from a minority of electric cars that produce zero carbon-dioxide (CO2) emissions, all new cars now attract vehicle excise duty (VED) from day one.For the first year, this is based on the amount of CO2 the car produces.

      From the second year, owners of all petrol and diesel cars with a list price of £40,000 or less pay a flat £140/yr – alternative fuel vehicles such as hybrids and those running LPG (ie, liquefied petroleum gas) will pay £130/yr.

      For cars with a list price of more than £40,000, an additional £310/yr for five years applies, after the first year, on top of the flat VED rate. This additional rate also applies to new zero-emission vehicles. See a full list of vehicle excise duty rates.

Vehicle excise duty rates from 1 April 2017
Petrol/diesel (list price £40,000 or less) Based on CO2 emissions £140/yr
Petrol/diesel (list price more than £40,000) Based on CO2 emissions £140/yr, plus £310/yr for five years
Alternative fuel (list price £40,000 or less) Based on CO2 emissions £130/yr
Alternative fuel (list price more than £40,000) Based on CO2 emissions £130/yr, plus £310/yr for five years
Zero emission vehicle (list price £40,000 or less) Zero Zero
Zero emission vehicle (list price more than £40,000) Zero £310/yr for five years

What’s a ‘list price’?

  • Smaller cars are cheaper to insure. If you’re looking to save money, you’ll want a car that’s cheap to cover. The cheapest to insure tend to have a lot in common, including size. Put simply, it’ll cost you more to insure a 4×4 than a small city runaround.Cars are placed in groups ranked between one and 50, using research by the Motor Insurance Repair Research Centre (Thatcham). This is based of a range of info including performance, safety features, price of a new model and cost of spare parts. The Hyundai i10, for example, is one of a handful of cars in group one, and thus is cheap to insure.

    Check the insurance group rating of the exact model you have in mind before buying at Thatcham Research. The higher the number, the bigger your premium is likely to be. It’s also worth checking our Cheap Car Insurance guide to see what the likely cost is.

All the above’s important, but if you want to nail the absolute cheapest cars to run, here they are (though do note these are all smaller cars):

Top 10 cheapest cars to run in the UK
Toyota Aygo 1.0 VVT-i 3dr £213
Peugeot 108 1.0 Access 3dr £213
Citroen C1 1.0 VTi Touch 3dr £228
Dacia Sandero 1.2 Access 5dr £228
Kia Picanto 1.1 1 5dr £232
Hyundai i10 1.0 S 5dr £233
Vauxhall Corsa 1.4 ecoFLEX Sting 3dr £234
Skoda Citigo 1.0 S 3dr £236
Volkswagen up! 1.0 Take Up 3dr £241
SEAT Mii 1.0 S 3dr £241
Source: Valuation service

Buy pre-reg & save up to 70% on the list price

Cars classed as ‘pre-reg’ come with chunky discounts off the list price because in theory they’ve already had one owner.

The way it works is that the dealer ‘buys’ the car, and registers it to the dealership. This is often done to artificially meet sales targets for the month or quarter. Dealers do this as they can often make more from bonuses for hitting targets than they can from selling you a car.

But, what it means for you is that you can buy a new car for a hefty discount, because its records will show it’s already had one owner. It’s all the benefits of a new car at a nearly new price.

How to find one

You can buy pre-reg cars just as you would any other new car. Many dealerships pre-reg cars to hit seasonal targets, so call around & ask if they have any in stock.

A pre-reg car shouldn’t be more than six months old, and you should get at least 20% off the ticket price, but you may get as much as 70% if it’s an unpopular model and the dealer is desperate to shift it.

If there’s one you’re interested in, haggle hard. Remember these cars have already served their purpose for the dealer by boosting sales targets.

It’s also worth asking about test-drive cars or showroom models – the savings can be massive.

Any cons?

  • You won’t be able to order any specific bells and whistles on a pre-reg – you’ll have to take the car as it is, or pay the extra for, eg, a paint respray if you want a different colour.
  • The warranty will have started from when the car was first registered, so you’ll have lost a bit of cover from this.
  • You may not be able to get the same attractive finance packages and low APRs on a pre-reg that you get on unregistered new cars.
  • Resale values won’t be as high as an unregistered set of wheels, as when you come to sell, the car will show two previous owners, not one.

Buy a run-out model and slash the cost by 30%

Are there cars that are about to be superseded by a newer model? These ‘run-out’ models are often found with discounts of up to 30% on the original price as dealers make way for shiny new stock on the forecourt.

However, check the resale price as these cars will slump in value when their replacements arrive. You can do this by putting the registration into a free online car valuation tool such as those offered by Parkers and Autotrader.

How to find one

These ‘run-out’ models can be bought from main dealers. You may also find them listed with brokers online or at car supermarkets.

To find out when to look for these ‘run-out’ models keep your eye on magazines and websites for reviews of the latest models – you can then look out for deals on the models they supersede.

‘How much will it cost me?’ checklist

If you’ve decided you’re definitely going to buy a brand new car, arm yourself with as much information as possible – and don’t be rushed into a decision.

You can check out every model online. What Car?CarbuyerHonest John and Parkers are among the best sites for research purposes – and don’t forget the Top Gear site for tons of online reviews.

There are two sorts of costs you need to budget for: upfront and ongoing. Check you’ve thought about all of the following and budgeted for them:

    • Any upfront costs. Once you’ve decided to buy a car, you will of course have to pay for it. You can either pay the whole cost upfront or take out a finance deal. Whichever way you choose, expect to at least pay some kind of down payment before you drive off.
    • Finance repayments. If you’ve taken a personal loan, or dealer finance, you’ll need to factor in repayments – read more on your finance options.
    • Fuel. To work out the rough cost of running a new car, the website has a fuel consumption search tool. Motoring website Honest John also has a handy ‘real MPG’ section where drivers have reported how many miles per gallon they actually get. See our Cheap Petrol Guide for how to cut costs.
    • Tax. You can check out how much road tax you’ll need to pay on the Gov.ukwebsite. You can also search for cars in a particular tax band. These range from A-M depending on the car’s CO2 emissions, with the cost of tax ranging from £0 to over £1,000 in year one. Standard rates then apply, at up to £500/year.
    • Car insurance. The cost of insurance is based on how much of a risk insurers perceive you to be. Eg, if you are a youngster who’s just passed your test, you will pay more for your cover. Plus, taking breakdown cover will bump up the cost. New cars often come with a year’s worth of breakdown cover. See our Cheap Car Insurance and Breakdown Cover guides for tips on how to cut costs.
    • MOTs. Once the car’s three years old, you’ll have to pay for an MOT every year, which costs £54.85 (for the test). Use our MOT guide for MoneySaving tips, including getting the test at local council centres, which could save you £100.
    • Servicing. You’ll need to get your car serviced regularly, typically once a year, though it varies by model. Servicing ensures it’s safe to drive and keeps the manufacturer’s warranty valid. A routine service typically starts around £120.
    • Parking permits and tolls. Unless you have free parking where you live, or a garage, you will probably have to pay for a resident’s permit. Check your council website to see how much this costs. Consider any costs to park at work if you drive there too, as well as toll charges you may face along the way.
    • Other spending. New tyres, repairs and valet cleans can add up, so make sure there’s some breathing room in your budget. So allow a couple of £100s extra for additional spending per year – just in case.
    • To print this checklist, click here:

DOWNLOAD PDF (403KB)See our guide to Motoring MoneySaving to cut driving costs. You can compare running costs of different models on sites such as Parkers and What Car?

Quick questions

How do I get the best finance deal?

How do I compare models?

What about car reliability?

Which cars are the safest to drive?

Manual vs automatic – which is best?

Need to flog your current car? Selling privately can net you £1,000s more than part-exchanging

If you need to flog your current wheels, you’ve two options – either part-exchanging the car at the dealership, where the dealer gives you a price and knocks it off the total cost of the car you’re buying, or selling privately – where you list the car and get cash from the person who buys it.

  • Part-exchange. This can save a lot of hassle, but it’s highly unlikely to be MoneySaving. Yes, it stops you having to advertise the car or deal with potential buyers, but, and this is a big but, you also won’t get as much as selling privately. Remember, the dealer will pay less than your car’s value so it can move it along at a profit. So weigh up offers carefully.
  • Selling privately. This is more time consuming, but you’re likely to get more for the car, if you’re prepared to put the effort in. Options include classified listings on Gumtree (free), PistonHeads (30-day ad is £11.99), Autotrader (prices from £12.95 one-off fee for a three-week ad) and Motors (12-week free ad). Other options include selling the car on eBay or Facebook

We investigated how much more you’d get selling your car privately, and a search for the value of several models on found the average price difference was often 20% more selling privately compared with part-exchange.

Difference between selling privately and part-exchange
Ford Fiesta Hatchback 1.25 Zetec 5dr [82] £6,432 £5,886
Volkswagen Golf Diesel Hatchback 1.6 TDi 105 BlueMotion 5dr £10,300 £8,730
BMW 3 Series Diesel Saloon 318d Exclusive Edition 4dr Step Auto £14,490 £12,430
Mini Hatchback 1.6 Cooper 3dr £8,830 £7,745
Source: Valuation service May 2015

If you do decide to part-exchange, watch for dealers inflating the trade-in price of your old car – making it look like you’re getting a good deal – but at the same time charging you more for the new model. Simply check how much cash you’ll hand over once you’ve swapped cars – that is the true cost of the deal.

Always haggle!

Haggling isn’t reserved just for backstreet bazaars, it’s a dealer’s classic skill – and it’s expected of you, too – so bargain hard, and play Arthur Daley at his own game. The first rule is that you should NEVER pay the list price of the car – you’d be a fool to hand over the full cost (unless buying online, where your haggle opportunities are limited!).

Arm yourself with the cheapest web prices and make dealers compete for your custom – What Car? lists a handy ‘target’ price for all brand new cars. Print this out and stick to it during negotiations.

Haggling can be daunting, even for hardened MoneySavers, yet there’s nothing to be scared of. Here are some of Martin’s top tactics (more in our Haggling guide).

  • The beginner’s haggle – get them to chuck something in for free. Dealers often say they’re not allowed to give discounts but if you’re new to haggling, an easy start point is asking them to throw something in on top. Whether it’s free sat-nav or floor mats, if you need an add-on, try not to pay extra for it.
  • Look for already discounted cars. If the price is already reduced, there’s often more flexibility. The boundaries have already been flexed and the psychological loss for the salesperson is reduced as they’ve already given up on the idea of getting full price.
  • Walk away – get them to call you back. Psychologically, if they have to chase you, rather than you being super keen, is more likely to lead to a better deal.
  • Don’t fill the silence. As negotiations come to a close, a classic sales technique is staying silent. They want you to accept the price just to fill the awkward silence. Make them fill it with a cheaper offer.
  • Flaws mean discounts. Look for the tiniest of dents or scratches. This makes them more difficult to flog, but still perfectly nice to drive. Keeerching!
  • Play them off against each other. To really up the haggling, don’t target dealers in isolation. Try to play off a number against each other. This has two advantages: it gives you a solid foundation and it prods their competitive instincts in your favour, as they want to prove they’re better than the opposition.
  • Be friendly, but firm. You’re more likely to get a result if the staff member empathises with you. If you’re polite, charming and treat the whole process with humour, you’ll get further.
  • Ask for the sun and you may just get the moon. Remember, do it with humour, do it with style and there’s no price or suggestion too outrageous. You can haggle virtually anywhere for anything.

MoneySaving success stories

Never sign on the day – walk away. You’ll start getting phone calls/emails the following days with better deals… I ended up with my target trade in, £2,000 off list price and 2.9% APR on a Ford Fiesta. It was 4.9% APR but they dropped to 2.9% when I walked away.

I got £4,500 discount off a £22,500 list price car that was a demo with just 900 miles on the clock. I also got them to cover my one-way £40 train fare and to put in a half tank of diesel for the journey home – if you don’t ask you don’t get, and the sales guy admitted it was just a small dent out of his commission to cover these.

Make sure any extras you buy are needed – and worth it!

The dealer will probably try to sell you a pimped-up version of whatever shiny model you want. This may include cruise control, Bluetooth, sat-nav or alloy wheels – or a car in a particular shade of metallic blue. All these will bump up the cost, but do you really NEED them? And if so, can you get them cheaper elsewhere?

For example, Navmii is a free app which turns a GPS smartphone into a sat-nav, with pre-loaded maps, route planning and voice prompts.

And then check what the dealer’s ‘throwing in’. This is usually anything from service plans, warranties and sometimes even a year’s insurance. But, always check these are actually thrown in for free. As above (see point 3) benchmark a price for the make and model you’re after – if the price is substantially above this, then it’s likely you’re paying for the extras in the price of the car itself.

But, don’t discount their worth. Warranties can save you £300-£500 a year compared with buying it separately; car insurance is often this much in a year too. It’s always worth comparing how much you’d pay outside of the ‘free’ add-ons. And then making an informed choice from there.

Also remember that it might be cheaper to buy a premium model with all the extras included rather than the basic model and then adding them on, like how a ‘make your own’ pizza can be more expensive.

Online broker prices could be up to 20% cheaper than dealerships

Chunky savings can be gained from internet-based car brokers. These typically bulk-buy popular models and pass on part of the saving to the customer. They can often undercut even the most generous dealers. Online brokers are less likely to take your existing car in part-exchange, but that’s not MoneySaving anyway.

Examples of popular brokers that work with a large network of franchised dealers include, and Simply input the model you want and the site will match you to a dealer looking to do a deal. You typically pay a deposit of around £500, with the balance on the day you get the car.

The discounts from some online brokers (you MAY get the same discount from a dealer – so always ask)
Ford Fiesta 1.0T 100PS 5dr £14,795 £10,920 £12,293 £12,206 20%
Nissan Qashqai 1.5 dCi Acenta £21,880 £18,074 £19,479 £19,118 14%
VW Golf 2.0 TDI 150 Match 5dr £23,325 £19,287 £20,601 £19,923 15%
Audi A4 2.0 TDI 163 Ultra SE Technik £29,740 N/A £25,672 £22,824 18%
Mercedes C220 Bluetec SE auto £31,675 £26,186 £27,954 £26,873 15%
Note: List price from, other prices from, and Correct as of 15 July 2015. * The list price does not take into account the discount a main dealer would offer on the new car.

Top tip! Let Carwow do the legwork for you. Simply enter the details of the new car you want onto the site, and get main dealer quotes emailed to you. The idea is to get ‘best offers’ from a database of 100s of dealers across the UK. See how the best price compares with quotes from online brokers to find the best price.

Diesel cars are more fuel efficient – but won’t be worth it for most…

Diesel engines are often more fuel-efficient than their petrol counterparts – and this remains true for most, even after the VW emissions scandal. But don’t be fooled into thinking this definitely makes diesel a better option. These cars are more expensive, and they usually cost more at the pump than petrol. The price of diesel can take years to claw back.

Let’s take an example. A five-door Ford Fiesta Zetec with a 1.5 litre diesel engine has a list price of £15,890. Its petrol equivalent comes in at £14,790, a difference of £1,100.

However, the diesel car is much more economical, delivering 59mpg compared with the petrol version’s 39mpg (both according to What Car’s true mpg calculator) which means that on a 10,000 miles per year basis, you’d spend £500 more filling up the petrol car than you would on the diesel (this assumes diesel and petrol are both 110p per litre, as at 25 Sep 2015).

In our example, you’d recoup the extra cost of the diesel car within just over two years. However, that doesn’t mean it’s the right choice for everyone. If you’re not doing regular, long journeys where you can achieve the maximum mpg, and you just want a car for pootling around town, it’s likely a small petrol or electric car will be your best bet.

Both offer their own advantages – and remember that fuel prices fluctuate, so check these at the time of buying.

  • More economical – higher mpg
  • Engines typically more robust – last longer
  • Ideal for long journeys
  • Commands higher resale values than equivalent petrol models
  • Vehicle excise duty is cheaper on diesel cars
  • Cars cost more to buy
  • Pricier parts if repair needed
  • Fuel is often more expensive in the UK
  • Petrol is usually cheaper in the UK
  • Good for short journeys
  • Engines are more responsive – suit ‘performance’ cars
  • Often less reliable than diesel cars
  • Vehicle excise duty is more expensive
  • Cars lose value slightly faster
  • Engines less efficient and use more fuel

So before you choose one or the other, check real MPG values from What Car? and Honest John. They’ll give you a much more accurate picture than the manufacturer’s ‘official’ MPG stats.

The ‘test drive’ checklist – the 13 things to check

Testing a car isn’t just about checking if it feels right. Make sure you follow our 13 things to check.

Remember, as you’re buying a new car, the test drive won’t be of your specific car. So if there’s a problem, consider whether this is likely to be car specific (in which case you don’t care), or if it’s likely to be a feature of the entire range (in which case you do).

    • Is your driving position comfortable? Can the seat slide, rise and tilt? Can you adjust the steering wheel position? Can you see all the mirrors and through the windows? Can you reach the pedals, gear stick and handbrake?
    • Try different routes. You should include the motorway if you’ll be driving on it.
    • Do an emergency stop on an empty road to double-check the brakes. Try the handbrake on a hill to be sure it holds; during emergency stopping, listen for any unusual rattling or banging sounds.
    • Check that the brakes and clutch function smoothly and effectively. Plus do a three-point turn to check for play in the steering.
    • Does it veer? Is the car veering to one side, or does it feel steady and balanced?
    • If you’ll be fitting a child car seat, will this go in easily? Or if you need to carry large items that will need the seats folded down, will they fit?
    • Bonnet, doors and boot. Are the bonnet, doors and boot easy to open? Do they close solidly?
    • What’s the passenger space like? Will people be comfortable on a long journey?
    • Boot space. If you’re likely to be carrying heavy or bulky items, will it be easy to lift them into the boot?
    • Is it smooth? Does it pull away, accelerate and cruise smoothly?
    • What’s the power like? Is it powerful enough to pull away from traffic lights and to keep going up hills without requiring endless gear changes?
    • What’s the engine noise (and other noises) like? Are there any irritating rattles or buzzes?
    • Check the suspension. How well does it soak up bumps and take corners?
    • Will it fit into your space? Have you got a dedicated parking space or garage? Is there going to be a problem fitting the car there?
    • To print this checklist, click here:


Pay something toward the car on a credit card (if you can) – it’ll give you protection

Pay even a penny toward your car on a credit card, and you get powerful extra protection if something goes wrong down the line. This is because you’re then covered by Section 75.

Provided that the total cost of the car you’re buying is between £100 and £30,000, paying anything towards it by credit card means the card company (or finance company, in some cases) is equally liable along with the dealer if things go wrong.

However, this isn’t straightforward. Some dealers don’t accept credit cards, others charge you for using one. Finally, some dealers will only allow you to pay a limited amount by card (eg, Mazda allows £1,000 on a card). So figure out how important this is, and ask your chosen dealer if it can accept cards before deciding how to pay.

Here’s a Section 75 deposit-only success story to give you some inspiration…

I ordered and paid £15,991 in full for a new car, but before I took delivery, the trader went into liquidation. Thankfully I had paid the first £100 deposit on my Barclaycard credit card. So I made a Section 75 claim. It took six months, but this week I received a credit to my card of the whole amount, just from having paid the first £100 on my card.

If you opt for finance from the dealer, Section 75 will usually apply. Hire purchase is the exception.

So, if you’re choosing a personal loan or savings to pay for your car, and not the dealer’s finance, it’s worth using a card to pay at least something. It just gives you that little extra peace of mind if something does go wrong.

Quick question

Am I still protected if the car costs more than £30,000?

Some manufacturers offer warranties lasting up to seven years

You’d hope that nothing is likely to go wrong with a new car – but what if it does? Your car will come with a warranty from the manufacturer. The majority offer a stingy three years’ worth of cover, while a few are up to seven years, or dependent on the number of miles driven.

This is actually a decent add-on to have, and it could save you £1,000s if there are problems. But, as manufacturer provided warranties tend to run out just as mechanical problems start to kick in, it might not be the most useful.

Some dealers offer longer warranties (5+ years), and if this is important to you, you could stick to car manufacturers offering this. Kia offers a particularly flexible warranty, guaranteeing its cars for seven years or 100,000 miles. Hyundai, Chevrolet and Toyota all offer five-year warranties.

Extending your warranty

If yours runs out after three years, it can be an expensive business to extend. Standalone warranty providers will charge upwards of £300 a year to extend the warranty of a three-year-old car – for example, a three-year-old Ford Focus would set you back £350 for one year’s extended warranty. An Audi A4 would be a massive £450.

Some dealers will try to flog you an extended warranty as part of their sales patter, but these can be pricey. Check out Warranty Direct’s Reliability Index. It tells you what problems cars are liable to have, and when, allowing you to decide if extending the warranty is likely to be worthwhile.

You can always buy one when the manufacturer’s warranty expires on a price comparison site. Beware that there’s endless choice and not all are any good, so check the clauses for any exclusions. A good policy will cover parts, labour AND consequential loss.

Quick questions

What should the warranty cover?

Are service packages ever worth it?

Important! Depending on your annual mileage, your car may not need to be serviced in the first year, so factor this into your sums.

‘Paperwork & spares’ checklist – 7 things to check

When you buy a new car you’ll be given a bunch of documents, so check you’ve got the right ones before paying up:

  • Logbook, or V5C. This is issued by the Driver and Vehicle Licensing Agency (DVLA) as proof that you are the keeper of the vehicle. It should list you as the registered keeper, though you may not be the owner if you’ve bought the car on finance.
  • Servicing booklet. Because the car’s new, it won’t have had any services yet. But you may still get a booklet to keep records in, as it’ll need servicing, and some of it will be required to maintain the warranty.
  • Manuals. Make sure you’ve got these. As cars get more and more technical, it’s good to have manuals as a backup.
  • Spares. If you were expecting a spare wheel, check it’s there along with the tools needed to change it.
  • Keys. Make sure you’re given at least one spare, as replacements are expensive.
  • Sales contract. Make sure you get a dated sales contract showing that you’ve completed the deal and paid the right money. Check your name and address, plus the full details of the car, the agreed price, and any payments already made.
  • Finance package. If you’re opting for finance, make sure you understand any jargon in the fine print before you sign.

To print this checklist, click here:DOWNLOAD PDF (403KB)

You need car insurance in place before you take ownership of the car

Make sure you sort out your car insurance before you take ownership of the car. Just like when you buy a property, you must have insurance in place as soon as you’ve become the legal owner – even if you’re not driving it just yet.

This is because if anything happens to it, it’s your responsibility. You might be taking extra care of your brand new car, but what if you get to the first roundabout on the drive home from the dealership and someone drives into the back of you?

It’s also illegal to drive on public roads without insurance. So make sure it’s insured before you pick up the car.

You can ask the dealer if the car comes with any insurance. You may be covered for a week (dealers often include this), but if not you’ll need to arrange insurance before driving the car away. So always check before you pick up your car.

Bear in mind that premiums can be pricey if you’re buying a flash new model, which is why it’s important to check you can afford the insurance before paying the deposit. For best deals see our Cheap Car Insurance guide.

Mind the gap – it might not be worth it

Gap insurance is one of those potentially useful policies that don’t have a very good reputation. Like PPI, they’ve been pushed hard onto unsuspecting consumers for years, and it’s now something that many are very wary of.

But – one of its problems has now been solved. Since September 2015, dealers will no longer be allowed to sell gap insurance to you at the same time as your finance deal. So, you don’t have to sit through the hard sell. But, should you get gap insurance anyway?

In itself, it’s not a bad product, and can be useful. There are three main types of gap insurance, but they all have the same general aim. See our Gap Insurance Guidefor more information.

How does gap insurance work?

If you have a crash, or your car’s stolen, your insurer will usually only pay out the amount the car is worth at that time.

Gap insurance is a policy you can buy, which pays out an amount above this, either to get you back to the original sale price of the car, to the amount you have outstanding on finance (which can, at times, be greater than the car’s worth), or to the amount it would cost to buy the car new now.

It’s offered because cars depreciate really quickly. The AA calculates that on average new cars lose 60% of their value within three years.

So, imagine you drive your shiny new Ford Focus off the forecourt. You paid £20,000 for it, and took £18,000 of finance from the dealer to pay for it. But, if you crashed it a few weeks later, because it’s not a new car, your insurance might only pay out £15,000 – the car’s worth now. But you still owe £18,000.

Is it worth it?

Not always. Most fully comprehensive car insurance policies will offer ‘new car replacement’ during the first 12 months of ownership anyway so you may just end up paying for something you’ve already got. So check your car insurance policy first.

It may be worth it if you risk owing more than the car is worth. This could be the case if you’ve bought on finance. So if the car is written off or stolen, you could be left without a car and owing £1,000s in outstanding payments.

Alternatively, if you’re concerned you wouldn’t be able to afford a replacement car if it’s written off or stolen, gap insurance could provide peace of mind.

The cost’s typically between £100 and £300 for three years’ worth of cover (as with any insurance, you can pay it monthly or as a one-off lump sum), depending on your car make and model, and the type of ‘gap’ you opt for.

Quick question

Where can I get cover?

Don’t assume you’ll be able to drive off the same day

You are unlikely to be able to drive a new car away on the day, even if you haggled the price by going for one of the showroom models. The dealer will want time to prepare it for sale, such as fitting optional extras and getting paperwork together. Yet, if you need your new wheels now, stipulate it as a point of the sale.

If you don’t need the car right away, ask for a time and date to pick it up and check a day or two before that it’ll definitely be ready.

If you chose a new car built to spec, a wait of several weeks isn’t unusual because it may be built overseas and needs to be shipped to the UK. Make sure anything you agree to with the dealer is in writing to avoid problems later on.

On delivery, check the car’s what you wanted, including any extras. If you find something you’re not happy with, avoid taking delivery of the car. If you have taken delivery and find something later, the more speedily you raise problems, the more chance of them taking it back and you getting a full refund.

Know your rights

A car is just like any other purchase, so if your car develops a problem, you’re not on your own – whether you bought from a dealer or online, you have rights

If you buy a new car from a dealer, you have some rights under the Consumer Rights Act. It must be “of a satisfactory quality”, “fit for purpose” and “as described”.

If you buy a car online, the sale is also subject to the consumer contracts regulations. This gives you a 14-day cooling off period after delivery when you can return the car and be entitled to a refund. This is meant to cover you for buying unseen goods that turn out to be not as described.

Depending on how you paid, you may have extra protection…

Credit card: If you paid a portion or the full sum with a credit card, you’ve got protection under Section 75. This makes the card provider and trader equally liable for any problems.

Source: Money Saving Expert 

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