20+ Tips on Buying a New Car
Bag the latest model & use our checklists to avoid rip-offs
If MoneySaving is your goal, buying a brand spanking new car off the factory line is no way to put pounds back in your pocket. The moment you drive a shiny new model off the forecourt you'll lose money, typically in the £1,000s.
But if you're still set on getting one, here are our top tips and vital checklists (print them out and bring them with you) for buying – and doing it as cheaply as possible. If saving money is more important than a spanking brand new car, see our 20 Tips When Buying a New Used Car guide.
If you've answered yes, and you and your partner were born on or after 6 April 1935, then you may be entitled to the marriage tax allowance. This allows couples to transfer a proportion of their personal allowance between them.
For the 2021/22 tax year, the marriage tax allowance is £1,260. This means a potential tax saving of £252.
Alternatively, if one of you was born before 6 April 1935, you can get a different married couple's allowance, which is also available to civil partners. See the Government's married couple's allowance calculator to see exactly what you'll get.
Ten per cent of the married couple's allowance is subtracted from your annual income tax bill. If you were married before 5 December 2005, it is automatically worked out using the husband's salary. For couples married on or after 5 December 2005, it uses the highest earner's salary.
Since April 2016, your savings interest has been paid to you tax-free, and the personal savings allowance (PSA) has come into play. The PSA means every basic-rate taxpayer can earn £1,000 interest a year without paying tax on it. Higher-rate payers get a £500 allowance, and additional-raters don't get an allowance.
There's no change to savings allowances in 2021/22.
If you're a low earner, there's another tax-free allowance you get called the starting rate for savings income. This allows you to earn another £5,000/year in savings interest tax-free if you earn less than £12,570/year this tax year. For every pound you earn above this threshold, you lose a pound of savings allowance. For more on this, see our Tax-Free Savings guide.
Also see our MSE car finance guides...
Personal contract purchase: it's flexible, but you won't own the car.
Leasing: it's a long-term car rental agreement that offers low monthly repayments.
Hire purchase: it looks like a loan, but you won't own the car until it's fully paid off.
Personal loans: buy your car with a loan.
Top tips when buying a new car
How much a new car 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…
Fiat Panda 0.9 TwinAir 85 Easy £11,245 £3,000 26.7% Fiat Punto 1.4 Pop+ £11,735 £3,075 26.2% Peugeot 308 1.6 Blue HDi 100 Active £19,650 £5,125 26.1% Alfa Romeo Giulietta 2.0 JTM-2 £22,060 £5,750 26.1% Skoda Rapid 1.4 TDI CR 90 SE £18,185 £4,725 26% Seat Toledo 1.6 TDI 115 Xcellence £21,970 £5,675 25.8% Vauxhall Cascada 2.0 CDTi 170 Elite £32,990 £8,350 25.3% Fiat Doblo 1.6 Multijet 120 Active (Eco Pack) £24,487 £5,550 22.7% Alfa Romeo Mito 1.3 JTDM-2 £15,980 £3,500 21.9% Renault Zoe I-Dynamique Nav Quick Charge £29,020 £5,100 17.6% Source: Whatcar.com, Feb 2018
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.
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, Drivethedeal.com, 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? Fuel efficiency or enough room for all the family?
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:
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.
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
A list price is defined as the published price before any discounts – so make sure you check if it's anywhere near £40,000.
- 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 4x4 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):
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 Cap.co.uk
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.
- 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.
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
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 are some 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 Mazda dealers will only let you pay £1,000 on a card.
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). It's best to clear the debt by the end of the 0% period – divide the cost of the car you're buying by the number of 0% months you have. Then set up a direct debit to pay this amount each month.
For the longest 0% cards currently available, see the Top 0% Spending Cards 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.
You can find some great 0% APR deals on HP, though these are usually reserved for those with a large deposit. If you don't get 0% finance, then expect to pay anywhere between 3% and 10% APR.
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 the end of two or three years (though you need to keep it in good condition, and stick to agreed mileage limits). 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 and want to change it often.
Leases start from £99 per month, but you could pay as much as £600 a month for a top-end car, so find one that suits your budget.
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.
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. 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:
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.
There are several online tools to compare one car against the other. All the sites listed above for research enable you to put in up to three makes and models. By popping three makes and models into Parker's comparison tool, you get details of the specs, pros and cons, and the price of new and used.
Most new car buyers have car reliability on their list of requirements. You can check out reviews for drivers' experiences with a particular model. Also, customer satisfaction surveys such as Auto Express magazine's 2014 Driver Power (50,000 responses) include winners in different categories: reliability, performance and build quality. The Honda Jazz scores top place for reliability, with the Toyota Prius in second place.
All models must pass certain safety tests, with minimum requirements. The European Automobile Safety Organisation (Euro NCAP) awards ratings to cars after testing how much protection they provide passengers in the event of a crash.
Like petrol vs diesel (see point 13) this choice is depends on your driving preferences. The Americans love automatic cars, but drivers in the UK are divided. Manufacturers typically offer a choice on their bestsellers, so here are some quick pros and cons:
More engaging drive
Cheaper to buy
Stop-starting can be tiring
No tedious gear shifting
May be more fuel-efficient
Less of a driving 'experience'
Pricier to fix
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 Autotrader.co.uk found the average price difference was often 20% more selling privately compared with part-exchange.
Ford Fiesta Hatchback 1.25 Zetec 5dr  £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 Cap.co.uk 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.
- 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.
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 Drivethedeal.com, Carfile.net, UK-car-discount.co.uk, Broadspeed.com and Saveonnewcars.co.uk. 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.
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 jato.com, other prices from drivethedeal.com, carfile.net and broadspeed.com. 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
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.
Section 75 covers purchases made on credit between £100 and £30,000. So a car costing £40,000 wouldn't be covered. However, certain credit agreements above £30,000 are now covered.
This protection comes under Section 75a and introduces an upper limit for claims of £60,260. It's a bit complex, because this protection relies on the finance being linked to an item.
So, the purchase wouldn't be covered if you'd used a credit card or personal loan as you could have used those to buy anything. A loan or other finance deal, specifically for the car, arranged through the dealership, would be covered.
The other big difference is that under Section 75a, you need to have tried to complain to the dealer before making a claim to the credit provider.
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.
Warranties should cover most mechanical and electrical faults, but typically won't cover wear and tear to tyres and brake pads. Most problems that might occur with a new car should be covered, which is why it can be valuable to have a decent warranty attached to the sale.
A lot of new cars come with a fixed service plan, so you pay an upfront fee that covers the first three to five years of services. These can be a brilliant way to fix your costs, but check this against what it would cost outside of a package before paying up. Call a few garages as well as the franchised dealership to give you an idea.
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:
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 Guide for 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.
Buy from an online broker, not a car dealer. You'll get it for a fraction of the price. Try these sites as a starting point to compare policies:
Remember to check the excess (the amount that comes out of your pocket if you claim) and policy type and details before signing up.
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.
Debit card: If you've paid this way, you may be able to get your money back through a scheme called 'chargeback'. Visa, Mastercard, Maestro and American Express have all signed up to this scheme – but it's not law, so you're less protected than with Section 75. See our Chargeback guide for more information.
If there's a problem with the car, stop using it and contact the dealer, giving it a chance to put it right. Keep records of any communication, and ask for agreements in writing. If this fails and you want to reject it, do so within six months of delivery and put details of why you're not happy with the car in writing.
If you're refused, contact the manufacturer and/or the finance company, if relevant.
You can demand a repair or replacement, or refund if these don't work, if the car fails on any point within six months. Legally, you can return it up to six years after you bought it, but you may struggle to prove that any fault isn't down to wear and tear. Even so, ask for a partial refund.
How much you're entitled to depends on how long you've owned the car and how many miles you've done.
If you bought the car on finance from the dealer or paid at least the deposit by credit card, you can take your complaint to the free Financial Ombudsman Service if you fail to get a resolution within eight weeks of making the initial complaint.
But if you bought with cash or a loan from the bank, find out if the dealer belongs to a trade association and go through its 'alternative dispute resolution' process.
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