Here are some car finance options:
0% credit card - the cheapest option if possible
If you can get a large enough credit limit (which can be difficult unless you buy a really cheap new car), you can buy a new car on a 0% purchase credit card. You’ll avoid paying any interest, provided you pay off the debt before the deal comes to an end.
However, there's a lot of pitfalls with this option, which won't make this a realistic option for many.
Firstly, many dealers won't accept credit cards. Or, some will accept them, but will only allow you to pay a limited amount on it - eg, some Mini dealers will only let you pay £2,000 on a card. And, some dealers will accept credit cards as full payment, but will charge you a fee to do so - often as much as 2%. It doesn't sound much, but it's an extra £100 on the cost of a £5k car.
Secondly, if you're using a credit card, you'll be limited in the amount you're able to spend - not many will give you a limit of more than £5,000, and most will be well below this.
But if against all odds, you are able to use a credit card, remember to keep up minimum monthly payments (if you don't, you could lose the 0% deal), and make a note in your diary of the end date so you can plan how to repay.
For more, see our Buying a Car with a Credit Card guide.
Personal loans - one of the cheapest ways to pay for a car purchase if you don't have savings to pay with
If you’re happy signing up for monthly repayments you could opt for a personal loan at a lower rate than dealer finance. But rates vary widely, so shop around on price comparison sites for the best deal. The best are only on offer to those with untarnished credit histories.
Rates vary depending on how much you're borrowing. Borrow a small amount, for example £1,500, and you could pay as much as 8% to 15% interest. If you're borrowing more, for example £15,000, you could pay as little as 3.5%.
But, before you go ahead thinking that sounds very cheap, there's a sting in the tail. These rates are what are known as 'representative' APRs. This means that only 51% of people accepted for that loan need to get that rate. The other 49% can, and often do, get given a higher rate.
For more, see our Buying a Car with a Personal Loan guide.
Hire purchase - similar to a loan but typically easier to get
If you choose hire purchase, you’re simply securing a loan on the car itself. You pay a deposit of typically around 10% of the car’s price and repay the balance plus interest over the loan period. But unlike a personal loan, you won’t own the car until you’ve made the final payment. So you can’t suddenly decide to sell the car without the lender’s permission.
It also means that if you default on your payments, the finance company will take the car and you won’t get any money back.
For more, see our Hire Purchase guide.
Leasing - could work out cheaper if you're not fussed about owning the car and want the latest model
Alternatively, you could ‘rent’ your car through a leasing deal, where you pay a monthly fixed sum and just hand the car back at, say, the end of three years. This option also means no forking out for MOTs or repairs – it’s a bit like renting a flat. You can use the car, but you don’t own it, so it’s not your responsibility to keep up repairs.
It's popular with companies, but can be great for personal use if you've got your heart set on a brand spanking new car that is really expensive. For other cars it can be mega expensive. There are car leases out there that start from £99 per month.
For more, see our Leasing guide.
Personal contract purchase - a type of loan that is super flexible with the option to own the car at the end of the deal
Another way to 'rent' a car is to opt for a personal contract purchase - or PCP for short. It's basically a loan to help you get a car. But unlike other loans - such as a personal loan or hire purchase - you won’t be paying off the full value of the car and you won’t own it at the end of the deal (unless you choose to, and if you do, you'll need to pay something called the balloon payment).
At the start of a PCP deal, you'll be asked to specify how far you'll drive the car each year. It's important to be as accurate as you can, as if you go over the agreed mileage limit, the finance company will charge 7p-10p for every mile you are over.
Watch out for this, as 1,000 miles over will see you shelling out £100 at the end of the deal.
For more, see our PCP guide.
Fuel. To work out the rough cost of running a new car, the Gov.uk 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.uk website. You can also search for cars in a particular tax band (A-M depending on the car’s CO2 emissions). The cost of tax range 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.
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?
How do I get the best finance deal?
Here are a couple of tips to make sure you get the best deal:
- Car dealers rake in the cash from selling finance – so haggle hard.
- The lower the APR, the less interest you’ll pay, so compare rates.
- But vitally, check the total amount repayable over the term.
- Do your sums – ads may quote weekly payments, disguising a pricey deal.
- Stand firm against pushy salesmen – there are tons of deals around.
- Check for additional fees such as set-up or early-repayment charges.
- Be aware some dealers will only offer finance from a small panel of lenders - so you could get a better deal by sorting it yourself. See Car Finance options.
What about common faults?
The biggest complaint made about used cars is that they develop a fault soon after purchase. You can lessen the chance of that happening by doing all the right checks when viewing the car. See point 10.
It’s also worth knowing what problems a particular model might have. There are tons of online reviews on the above sites and forums that will flag any common problems that could mean costly repairs down the line. A common fault such as a broken clutches could cost around £400 to repair.
How can you get the best value?
By the time a car is around four years old it’s often great value as its price has most likely halved since new, even though they may have just 20,000-30,000 miles on the clock. So it can be worth narrowing your search to these.
Remember that depreciation can prove a shock. What Car? has calculators to work the impact of this out, showing how much a car loses value each year. The older the car gets, the less important this is. But whatever age the car, remember you’re NOT buying an asset that will increase in value, like a house!
Which cars are the safest to drive?
All models must pass certain safety tests, with minimum requirements. The European Automobile Safety Organisation (Euro NCAP) awards star ratings to cars after testing how much protection they provide passengers in the event of a crash. You can quickly search for a review by make and model.
Manual vs automatic - which is best?
This choice is depends on your driving preferences. The Americans love clutchless motors, but drivers in the UK are still divided. Manufacturers typically offer a choice on their best-sellers, so here are some quick pros and cons:
Check as many dealerships as possible and pit them against each other
Ask all the dealers in your area for their best deal on your second-hand car of choice. If you’re prepared to travel far and wide to find a rock-bottom price, expand your radius. Make a note of the best price, and ask others to beat it.
You can always go back to your local dealer to ask if they’ll match the best offer. They might be keen for your cash, and happy to offer the same deal.
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.
- 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.
- 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.
- 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. This is covered in the point above but worth mentioning again. 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.
- Watch for the "whack-a-mole" effect. Haggle on the price of the car, and the dealer might then charge more for the finance. Haggle on the finance, and there might be no wiggle room on the price of the car. It's worth doing your sums to see how much each saving from haggling will be - and taking the most valuable.
- 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.
If you're buying privately, it never hurts to make an offer. The worst they can say is no. And even if you walk away then, the seller could call you back if there's been little further interest.
For more tips, see our Haggle guide.
Note! Some car supermarkets have a no-haggle policy, so check this out beforehand.
Buying a used car checklist: What to look for?
It's not just about rocking up and liking the look of the car - instead you need to look at everything, from the paintwork to the tyres, seatbelts and headlights. Make sure you follow our nine things to check:
To print this checklist, click here: Download PDF (403KB)
- Check the car’s mileage. The average covered is around 10,000 miles a year, so if the odometer’s figure appears wildly out for its age, ask why. If the answer doesn’t stack up, be suspicious. Crooks may have ‘clocked’ the odometer. You can also check the last service for the mileage to see if this is in line with the figure.
An HPI check (see point 12) will also check this, as well as tell you if the car's previously been written off, or cut-and-shut (parts from two cars welded together). Watch out for category D cars too. These have been in crashes previously, and often cost £1,000s less than you'd expect. Here's the Category D lowdown.
- Overall condition. Cast a beady eye over the car’s condition, crouching down to look for scratches and dents.
- Check repairs. See if there are any signs of poor repair, such as gaps between body panels after crash damage.
- Check the oil. Do this by lifting out the dipstick to see if the level's correct.
- The engine. Look at the engine for signs of oil or water leaks, as well as the surrounding parts – and look under the car for any signs of leaks too.
- Test the radio. Plus all other gadgets to make sure they work.
- Turn on the lights! Check these work, and that you can open and close the windows easily.
- Is it safe? Vitally, does the car seem in safe condition to drive. Trust your gut – if the seats are sagging and the car looks like it’s ready for the scrap heap, continue your search elsewhere.
- What about the tyres? Check for tread and inflation.
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. But don’t be fooled into thinking this definitely makes diesel a better option.
It's possible to pay almost whatever you want for a used car, though you tend to find that diesel cars - even used - are slightly more expensive than petrol. But, where people think diesel is much better value is on the petrol station forecourt. And this tends to be true - even in today's environment where petrol and diesel prices are much of a muchness,
Let's take an example. A diesel Ford Fiesta can deliver 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 £600 more filling up the petrol car than you would on the diesel (this assumes diesel and petrol are both approximately 120p per litre, as at 25 Jan 2017).
However, you need to remember that not everyone will achieve these mpgs. If you're not doing regular, long journeys where the engine's most efficient, then it's unlikely you'll actually make any savings from going for the diesel model. If 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
- Cars cost more to buy
- Vehicle excise duty is cheaper on diesel cars
- Pricier parts if repair needed
- Commands higher resale values than equivalent petrol models
- Fuel is oftenmore expensive
in the UK
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.
'Test drive' checklist - the 14 things to check
Any seller should expect that you’ll want to take the car for a spin before making a decision, so use this time wisely. Testing a car isn't just about checking if it feels right. Make sure you follow our 14 things to check.
To print this checklist, click here: Download PDF (403KB)
- Is your driving position at the wheel 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?
- If you’ll be fitting a child car seat, will this go in easily? Or if you need to carry large items such as golf clubs, will they fit?
- Try different routes. Include the motorway if you’ll be driving on this.
- Do an emergency stop on an empty road to double check the brakes. Try the handbrake on a hill and 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 balanced?
- Bonnet, doors and boot. Are the bonnet, doors and boot easy to open?
- 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 the car pull away 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 (or any other noise) 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 is it off street parking? Is th ere going to be a problem fitting the car there?
Important! Check you’re insured before doing a test drive. If you’re buying from a private seller ask them to take you for a drive if you wouldn’t be covered by insurance behind the wheel. If you have full, comprehensive car insurance already you may have third-party cover that allows you to drive another car. But always check with your insurer.
Buying from a dealer gives you extra protection, but costs more than buying privately
Most car firms have an approved used section, meaning they've checked the cars over before selling them. Dealers often give warranties on approved used cars, and will have made the car look and feel new, with faulty parts replaced before sale.
So you may pay more buying from a dealer than from a private buyer, but this route often gives you peace of mind about the car, and makes it easier to make a complaint if things go wrong – which they often can with used cars.
If the car turns out to be faulty (and you didn't know about it), you should be able to get a refund, repair or replacement. See point 18 for more.
Alternatively, if you’re willing to pay a bit more for peace of mind you could buy ‘approved used’ from a car manufacturer’s franchised dealer (eg, you buy a Ford from a Ford dealership). This is the most expensive option, but the car’s history should’ve already been checked and it will come with a warranty.
Warning! Be wary of any dealer that displays signs such as ‘sold as seen’ or ‘no refund’. They are sneakily trying to limit your rights, so make sure you check the conditions of sale.
How do I find a reputable dealer?
You can check that a dealer is listed as a member of the Retail Motor Industry Federation. It's voluntary to join, but those who have commit to a certain code of practice which demands particular standards. Look for an established firm and check for online reviews. Also ask friends for recommendations.
Some of the biggest names in the motoring business offer used cars for sale online, such as AA Car and RAC Cars. These only allow dealers that have met strict criteria to sell on their sites, and cars come with a history check to ensure you won’t get any nasty surprises. AA also offers free breakdown cover for 12 months, RAC for six months.
As well as advertising their cars on classified sites to reach the biggest audience, some big dealer chains and car supermarkets have their own websites. These enable you to buy a car without the bother of visiting a showroom – but be wary of ads shouting about massive discounts. You may get a better deal going privately, and doing your own groundwork.
Motorpoint.co.uk has eight branches around the UK and no ties to a specific manufacturer. It offers similar services to a franchised dealer, including test drives and part exchanges.
Carcraft.co.uk has 11 showrooms across the UK. Cars come with a seven-day exchange policy, 12 months breakdown cover, and free servicing for a year.
Cargiant.co.uk has cheap prices and a no-haggle policy. But beware, you can’t pay by credit card so cannot use this to give you rights under Section 75 if something goes wrong.
If you are definitely happy to go ahead and do the deal online, ensure the seller will carry out history and physical checks on cars before you pay.
What questions should I ask a dealer?
Buying from a used car dealer might scream ‘dodgy’ but go armed with the right questions and a large dose of suspicion, and there are bargains to be had. However, trust your instincts. If you reckon a seller is desperately trying to shift a dodgy old banger, walk away.
Questions to ask:
- What’s the service history?
- Can I see the MOT certificate?
- What is the car’s mileage, and can you prove it’s genuine?
- Has the car been involved in any accidents?
- Are there any problems with the car, such as parts that aren’t working?
- What’s included in the price?
- What does the warranty cover?
If you're buying from a private seller there are still ways to protect yourself
Private sales are a case of caveat emptor, or “let the buyer beware”. This means it’s your responsibility to check the car’s condition and history, and you have far fewer rights if something goes wrong than you do buying from a dealer. That said, it could be the cheapest way to buy a used car.
The seller must give an accurate description. But it can be hard to prove if they pulled the wool over your eyes – so keep copies of the original advert. If the seller describes the car over the phone, ask for confirmation details on email.
You can find thousands of private car ads on as Ebay and Gumtree. Even if you reckon the seller is reputable, always check everything yourself.
Go to a seller’s home to see the car, not a carpark or station. If the seller offers viewings anywhere other than their home, think again. This could mean they don’t want you to know where they live if there’s a problem. Take a friend or family member as another precaution, and for a useful second opinion on the purchase.
The Vehicle Safe Trading Advisory Group (Vstag) has useful Buying Safety Tips that might come in handy.
Warning! Always check the car's history. You’d be foolish to buy without doing some checks on a used car – if only for peace of mind. An HPI check will tell you if the car has any outstanding finance, or has previously been stolen or written off by an insurer. It costs £20, but could save you from losses much higher than that if you don't check.
Around one in four used cars have hidden histories that could come back to haunt you, according to the RAC.
What could go wrong?
Unfortunately, several things could go wrong. Here are the most common:
- The car has outstanding finance – it could be repossessed, without warning.
- The car’s been stolen – the police could ask for the car back.
- The mileage has been ‘clocked’ – you buy a car with a far higher mileage than stated.
- The car has major faults – you end up with a dodgy old banger.
- It’s massively over-priced – you’re ripped off!
Where’s the best place to get check a car's history?
Some sellers will provide a full report themselves – but in any case, you might want to do your own checks.
You can pay £14.99 for the RAC Car Passport. This is a great value all-rounder, giving you the car’s history alongside common make and model faults, buying checklists and valuation.
Or there are plenty of other options including the AA car history check and hpicheck.com, both costing £19.99.
All reports from these sites come with a guarantee. So if any critical information is missed, you’ll be reimbursed for any financial loss up to £30,000.
Make sure however you do the check the company you use takes responsibility clearly for the accuracy of the information.
Should I do any other checks?
There are several others worth doing to give as much information as possible on the car you’re buying, and provide valuable peace of mind.
Make a note of the registration and V5C reference numbers and check the car’s MOT status and details from 2005 online at Gov.uk. This will tell you the mileage readings at tests, dates of previous MOTs, and any faults found.
Check with the DVLA that the car’s colour, engine size/number and date of registration match the V5C (log book).
It’s also worth checking the vehicle identification number (VIN) under the bonnet to see if this matches the paperwork.
What should I check in the documents?
Here's a checklist:
- The number of owners
- Mileage and dates of service
- Receipts for the services, matching these against stamps in the book. It’s vital to check service history, or you risk massive repair bills.
- Pay close attention to the V5C vehicle registration document before the sale. This shows who is the registered keeper of the car. Never buy without one! Use the DVLA enquiry service at Gov.uk to check the details match the vehicle’s records.
- Check that the MOT certificate is valid and see if there is any trouble that may need fixing at the next one, such as old tyres.
Car purchases are NOT protected on eBay
You can buy all sorts on eBay, but a car? Would you want to risk this? Lots of people do. In fact, eBay is one of the most popular places to pick up a used car.
But if you pay using PayPal its purchase protection does NOT apply to cars – and neither does eBay’s own buyer protection. So if anything goes wrong, you cannot turn to either to sort it out.
So make sure you've done all the necessary checks before you place a bid.
What is eBay’s protection?
On its website eBay states: “Most eBay sales go smoothly, but if there’s a problem with a purchase, the eBay Money Back Guarantee assures that buyers receive the item they ordered, or get their money back.”
This could be that the item isn’t as described, or doesn’t arrive…BUT this doesn’t apply to cars. This could open a can of worms if anything goes wrong.
What shall I think of if I want to buy a car on eBay?
If you still want to go ahead, you should visit and test-drive the car and go through the usual procedures of buying privately, rather than just bid in an auction sight-unseen. See the tips for buying privately and go through the same process, and take care.
- Don’t buy a car having never used eBay before. You need to familiarise yourself with the how the site works, and feel comfortable with this.
- Don’t search too far away from home – you MUST see the car! Most auctions last days, so if you get them early that gives you plenty of time to visit.
- Set your maximum price and stick to this. It’s tempting to up this to seal the deal, but don’t let the excitement break your resolve.
- Meet the seller in a safe place – ideally their home - and take a friend if possible.
- Perform all history checks for buying privately.
- Ask where they bought the car, why they’re selling, and any other questions that may help you feel comfortable about the sale.
- Check the car’s value on Parkers, What Car? and Glass’s Guide to find out if the price is about right. Be suspicious if the car’s listed at a bargain basement price.
- Remember to factor in the cost of insurance, registration, taxes and other running costs.
- Check out your seller. Check the seller’s feedback rating to see if it’s positive and ask questions about the car’s condition before placing a bid. Do they seem upfront and honest?
- Sellers must be easily contactable – ask if you can give them a call to double check before meeting them in person.
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 deals are 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.
What if I’m buying the car from a private seller?
You probably can’t pay by card. In this case, you will probably pay by cheque, PayPal or online banking. The seller will most likely wait for payment to clear before letting you take the car.
However you pay, ask for a signed and dated receipt. This should include your name and the seller’s, along with details of the car, price, and address where you bought.
Make sure any extras you buy are needed - and worth it!
The dealer will probably try to sell you the premium version of whatever model you've selected. This may include models they have on the forecourt with cruise control, Bluetooth, sat-nav or alloy wheels. 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 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 at several used car dealerships - 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, especially on used cars; car insurance is often this much in a year too. It's always worth comparing how much you'd pay for a version of that car without all the mod-cons. And then making an informed choice from there.
Do you need an extended warranty?
The dealer will try to flog you an extended warranty as part of their sales patter, but these can be pricey. 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.
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 or seller's home 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.
If buying from a dealer, you can ask 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.
For best deals see our Cheap Car Insurance guide.
What about tax?
Any remaining tax on the car isn’t transferable between owners – so you’ll need to get the car taxed as soon as you take ownership. You can do this online at Gov.uk. However, try to buy at the start of the month - if you buy on, say, 25 May, you'll need to pay the full tax premium for May, even though you haven't owned the car.
'Paperwork & spares' checklist - the seven things to check
When you buy a used car you’ll be given a bunch of documents, so check you’ve got the right ones before paying up.
To print this checklist, click here: Download PDF (403KB)
- 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. Check that you've got this as it will list when the car was last serviced, as well as what's been repaired/replaced.
- 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.
Know your rights
Second-hand cars are one of the most complained about issues, with Citizens Advice and Trading Standards receiving 10,000s of complaints a year. These are often about a fault, but sometimes the problems are so bad the car needs to be scrapped.
If the car had a blindingly obvious flaw when you bought it, you wouldn't expect it to be the car of your dreams. But if you paid a fair price, and the car goes kaput once you get home, you usually have rights - even if it's a new problem...
If you bought from a dealer
If you bought the car from a dealer you have rights under the Consumer Rights Act - see our Consumer Rights guide for more info.
The car must be of “satisfactory quality”, “as described”, “fit for purpose”, and last a reasonable length of time. The dealer has broken their contract with you if the car doesn’t meet these criteria.
What are you entitled to?
If the car turns out to be faulty (and the fault wasn’t obvious, like an engine problem or worn out clutch), you should be able to get a repair or replacement or refund if these don’t work.
If the dealer say they pointed out the fault, did they tell you the full extent of the problem? Say you were told the clutch is stiff but it’s worn through, then they should sort it out.
Important! If you return the car within six months, then it's up to the dealer to prove the car wasn't faulty when you bought it. After this, it's up to you to prove the car was faulty at that time.
You may be entitled to a full refund if the fault is serious, and picked up quickly after the sale and you’ve stopped using the car. If you’ve had the car for some time ask for a partial refund.
What if you bought using finance?
If you bought the car on finance or paid the deposit on a credit card from the dealer you can take your complaint to the Financial Ombudsman Service. That is, if you fail get a resolution within eight weeks by taking your complaint to the dealer or the finance company.
Alternatively, if you bought with cash or a loan from the bank, find out if the dealer belongs to a trade association. Go through its ‘alternative dispute resolution’ process. See Citizens Advice for more.
If you bought privately
If you’ve bought a second-hand car from a private seller, your rights are nowhere near as strong. Essentially, the car is sold ‘as seen’. The car doesn’t have to be of satisfactory quality OR fit for purpose, which leaves you on wobbly ground if there’s a problem. It’s really a case of ‘buyer beware’.
Say the seller says nothing about an engine problem and you buy it, then that's it. Even if the car shudders to a halt a week later, you weren't mis-sold, so have no comeback. Though if they lie to you – you do. The seller mustn’t lie about the car’s condition or history. This is why it’s vital to ask the right questions. This could mean the seller failing to mention an outstanding major and expensive service issue when asked, a past accident or false mileage.
If you discover they have misled you, you should be able to return the car and get a refund. You’ll have to prove that the seller did know about the problem though, and that could be difficult.
If you bought at auction
Ok, so you have few rights. The useful parts of the Consumer Rights Act might not apply. Auction houses can exclude these, and cars are usually labelled clearly ‘as seen’ with no claims as to the condition of the vehicle, so check the terms and conditions of sale before buying. Some car auctioneers belong to the National Association of Motor Auctions (NAMA), which has a code of practice.
If you bought online, you have additional rights under the consumer contracts regulations. See our Consumer Rights guide for more info. This means you have a 14-day cooling off period to change your mind once you’ve got the car.
What if you get nowhere?
If your complaint falls on deaf ears, there are several other steps you can take to fight back. See the full How To Complain guide to see which is best for you, or the Small Claims Court guide on how to take legal action for claims of up to £10,000.