20+ tips on buying a new car

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.
  
  See a full list of vehicle excise duty rates.

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.

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.

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.

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...

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:

If the car is written off or stolen, your insurer will pay out what it's worth at the time – so you're likely to get less from the insurance company than you paid when you bought it, especially if it's brand new. This means when you're getting a replacement car there's a 'gap' between the amount your insurer pays and the amount you'd need to pay to buy that car (or a similar new model) again.

If you choose to buy gap (guaranteed asset protection) insurance, this is the 'gap' it covers. Dealerships usually sell it - as do standalone providers - and policies are typically priced between £100 and £300 for three years' worth of cover.

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

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.