Best way to buy a new or used car
Get the best price & use our vital checklists to avoid rip-offs
Buying a car – whether used or new, cheap runaround or dream machine – can be a MoneySaving minefield, particularly if you're no petrolhead. This guide is packed with top tips and checklists to get you motoring and minimise the chance of any nasty surprises.
Also see our car finance guides...
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Hire purchase: Looks like a loan, but you won't own the car until it's fully paid off.
Leasing: A long-term car rental agreement that offers low monthly repayments.
Personal contract purchase: Flexible, but you won't own the car you buy.
Personal loans: Buy your car with a loan.
New petrol and diesel car 'ban' pushed back. In November 2020, the Government announced that new cars and vans powered wholly by petrol and diesel would no longer be sold in the UK from 2030. In September last year, Prime Minister Rishi Sunak announced this would be pushed back to 2035.
Top tips when buying a car – new or used
How much a car will cost you will ultimately depend on what you get. Yet there are plenty of ways you can reduce the final bill. Below are our tips for buying a used car, plus information for those insistent on stumping up for a brand new car.
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Year-old cars are MUCH cheaper than new cars
A car's value starts to depreciate as soon as it leaves the showroom, so even picking a year-old model will dramatically slash the upfront cost.
Auto Trader says a new car loses up to 50% of its value in the first three years. 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.
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).
If I do buy a new car, how can I cut the costs?
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Revealed: The cheapest cars to run
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The best time to buy a 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.
But if you're buying from a private seller, there's unlikely to be a good or bad time, as they don't have targets to meet, other than the price they want to get for their car. If you're buying this way, keep an eye on prices a few months beforehand – if they're heading down, you may want to wait. Heading up, and it's prudent to buy sooner.
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 SaversammyFor 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.
If you’re buying privately, it’s also worth picking your time when other potential buyers might be away. This could be over Christmas, or deep into the summer holidays. Think about the style of car too. Summer is when drivers dream of buying convertibles, making winter a good time to haggle for a deal on one.
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'What car do I need?' checklist
Before you start browsing for the 'one', think about what you really NEED from a car. There’s no point buying a two-seater convertible if you’re about to start a family, so work out what's realistic. Ask yourself:
What are my essential requirements? Enough room for the family? A cheap car to run? A sporty number? Think about what you need...
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.
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Need to flog your current car? Selling privately can net you 20% more than part-exchanging
If you need to flog your current wheels, you've two options. You can either part-exchange 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 you can sell privately – where you list the car and get cash from the person who buys it.
We investigated how much more you'd get selling your car privately, and a search for the value of several models on Auto Trader found the price difference was often 20% more selling privately compared with part-exchange.
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.
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'How much will it cost me?' checklist
Before you start doing your sums you need to decide what car you want.
You can check out every model online. Carbuyer, Honest John, Parkers and What Car? are among the best websites for research purposes – and for tons of online reviews don’t forget the Top Gear site.
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:
You can compare running costs of different models on sites such as Parkers and What Car?. And to cut driving costs, see our guide to Motoring MoneySaving.
Quick questions
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Check as many dealerships as possible and pit them against each other
If you're buying a second-hand car, ask all the dealers in your area for their best deal. 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.
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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. 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 – handily you can find a 'target price' for all brand new cars using the What Car? new car deals finder. Have this displayed on your phone, make a note of it or print it 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 Haggling on the high street).
Note: Some car dealerships and supermarkets, such as Cazoo, have a no-haggle policy, so check this out before trying your hand.
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 do is say no. And even if you walk away there and then, the seller could call you back if there's been little further interest.
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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:
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. Someone may have ‘clocked’ the odometer. You can also check the last service for the mileage.
You can look out for this, as well as find out if the car's previously been written off, or 'cut-and-shut' (where parts from two cars have been welded together), with an HPI check.
Watch out for 'Category N' (previously 'Category D') cars too. These are cars that have been in crashes previously, and while they didn't suffer any structural damage, could still have vital parts that need replacing, which is why they often cost £1,000s less than you'd expect. For the lowdown on classifications of written-off cars, see this What Car? guide.Overall condition. Cast a beady eye over the car’s condition, crouching down to look for scratches and dents. Checking inside is as important as checking outside – it can indicate how the car has (or hasn't been) cared for, as well as giving you an idea of if its mileage is accurate.
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. If you're not familiar with engines, but know someone who is, ask them to come along. Look out for wear and tear, especially if the car hasn't got a particularly high mileage. Check 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.
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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.
If you're not regularly doing long journeys where the engine's most efficient, then it's unlikely you'll actually make any savings from going for a diesel model. If you just want a car for pootling around in, 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.
So before you choose one or the other, check the real miles per gallon (MPG) values using Honest John and What Car?, which will give you a much more accurate picture than the manufacturer's 'official' MPG stats.
IMPORTANT. Do you have or have you had a diesel car that was made between 2009 and 2020?
If so, you could be due money back thanks to 'Dieselgate'. This is because it's claimed that carmakers used illegal 'defeat devices' in their diesel vehicles to cheat the tests done by regulators to check their emissions levels, before approving them for sale.
Learn more in our Diesel emission claims guide.
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'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.
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 there 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.
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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.
You may pay more buying from a dealer than privately, but this route often gives you peace of mind about the car, and makes it easier to complain if things go wrong.
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.
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 (such as a used Ford car 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.
Quick questions
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If you're buying from a private seller there are still ways to protect yourself
Private sales are a case of 'let the buyer beware' (often referred to by the Latin phrase 'caveat emptor'). 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 via 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.
Safety measures
Go to a seller’s home to see the car, not a car park 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.
If the asking price sounds too good to be true, it likely is, so proceed with caution – if it's below what similar models are generally going for, it could be a sign that it's a scam or the car has an underlying issue. Read the advert carefully, ask the seller why the price is what it is, use the buying a used car checklist and do a vehicle history check.
Don't pay a penny until you've seen the car and checked it out, along with its documentation – scammers often try to persuade people to transfer money ahead of the 'viewing'. If you're asked for a deposit, don't pay more than you can afford to lose, and have the seller confirm in writing that they'll refund it if you decide against buying.
And DON'T carry large wads of cash – for your personal safety as well as because other payment methods provide protection if things go wrong.
The Vehicle Safe Trading Advisory Group (VSTAG) has a buying checklist that's worth taking a look at.
Warning. Always check the car's history. A vehicle history check, also known as a hire purchase investigation (HPI) check, will tell you if the car has outstanding finance or has previously been scrapped, stolen or written off by an insurer. It costs £15-£20 for a full check, but could save you from losses much higher if you don't check. Over half of used cars have hidden histories that could come back to haunt you, according to RAC data in 2019.
Quick questions
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Car purchases are NOT protected on eBay
It might sound risky, but one of the most popular places to buy used cars is eBay*.
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.
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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 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 may only allow you to pay a limited amount by card. So figure out how important this is, and ask your chosen dealer if it can accept credit 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.
Quick question
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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 Bluetooth, cruise control, parking sensors, sat-nav and so on. All these will bump up the cost, but do you NEED them? And if so, can you get them cheaper elsewhere?
For example, Google Maps (avaiable for Android and iOS devices) and Navmii (also available for Android and iOS devices) are both free apps which turn a smartphone or tablet into a sat-nav, with Global Positioning System (GPS) navigation, offline maps, real-time traffic updates, voice-guided navigation and more.
Then check what the dealer's 'throwing in'. This is usually anything from service plans to extended warranties and sometimes even insurance. But, always check these are actually free. As we mentioned previously, 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 completely. Warranties can save you £300-£500 a year compared with buying them separately, especially on used cars – car insurance is often this much a year too. It's 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.
Quick question
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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 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. And also make sure your policy is valid on your new vehicle if you're transferring car insurance.
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.
To find the best deals, see our Cheap car insurance guide and use our revolutionary Compare+ car insurance tool.
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, which you can do online using the Gov.uk website.
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 for most of the month. -
'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.
Logbook, or V5C. This is issued by the DVLA as proof that you're the keeper of the vehicle. It should list you as the registered keeper, though you may not be the owner if you bought on finance. Ensure it's genuine by looking for the DVLA watermark running through it.
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 get 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.
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If you're buying a new car 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 (five years or more), and if this is important to you, you could stick to car manufacturers offering this.
Quick questions
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If you're buying a new car, mind the gap – it might not be worth it
Warning: Gap insurance sales paused – PLEASE READ. In February, the Financial Conduct Authority (FCA) told insurers to pause selling gap insurance due to concerns the product is "failing to provide fair value to some consumers".
As a consequence, we've left this point here so the information is still available, but you can no longer buy cover via our Gap insurance guide. For more details, see the FCA website.Guaranteed asset protection insurance – more commonly known as gap insurance – can cover the difference between the amount you paid for your car (or owe on your car if you have finance), and the amount an insurance company would give you if it was written off or stolen.
Gap insurance is one of those potentially useful types of policies that don't have a very good reputation. Like payment protection insurance (PPI), it's been pushed hard onto unsuspecting consumers for years, and it's now something that many are very wary of.
One of the problems with it has been solved. Since 2015, dealers have no longer been 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. For more information, see our Gap insurance guide.
Quick questions
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Buying a new car? Don't assume you'll be able to drive off on the same day
You're unlikely to be able to drive a new car away on the day, even if you haggled the price down 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. But if you need your new wheels immediately, 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 need to be shipped to the UK. Make sure anything you agree to with the dealer is in writing to avoid any 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 you're not happy with later on, the more speedily you raise problems, the more chance there is of the dealer taking it back and you getting a replacement or full refund.
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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...
What if you get nowhere?
If your complaint falls on deaf ears, there are other steps you can take to fight back. To see how to take legal action for claims of up to £10,000, check out our Small claims court guide.
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