Buying a new car
Whether you're in the market for a supermini or a supercar, there's nothing
quite like buying brand new. For this reason, we've compiled a short guide
so you can make a more informed choice about how, where and when to buy
your next new car.
Before you buy
It may sound obvious, but your first consideration should be your budget.
Think beyond the retail price of the car when setting a budget and factor
in 'on the road' and other running costs including fuel consumption, car
insurance premiums, road tax, regular servicing and maintenance. It's
well worth getting some
car insurance quotes
before you settle on a particular model, and remember that the
higher the insurance group, the more costly the car will be to insure.
Once you've set a budget, the golden rule is to stick to it - after all,
there's really no point scraping the cash together to buy a new car if
you then can't afford to run it.
Whilst you may already have a specific idea of what car is right for you,
it's well worth paying some thought to:
Ask yourself what you need from the car to ensure that your final choice
fulfils those needs. Match the car to your lifestyle, not the other way
round. In addition, if you have children you'll need to ensure that they
can be accommodated comfortably – either in child seats or strapped in by
a three point seat belt.
Optional extras will not only make owning a car a more pleasurable experience,
but can also make it easier to sell. Air conditioning is not always included
as standard and is highly desirable, as is a CD player and metallic paint.
However much you love your new car now, you probably won't want to own it
forever and so the more individual your choice of colour, the fewer potential
buyers you'll have. A garish or unpopular colour can also affect a car's
value in the future, particularly at part-exchange - so if this is
important to you, stick to 'safe' colours such as silver, blue, red
or black.
Depreciation is the decrease in a car's value over time and the biggest single
cost of new car ownership; usually it is measured as a percentage of a car's
value over three years or 36,000 miles, compared to its price new. A car with
heavy depreciation may only be worth 30% of its sale value after three years,
whilst a car with low depreciation may be worth up to 75%. It's important to
factor depreciation into the buying process as when you come to sell or
part-exchange the car in the future, its depreciation will dictate how much
it is worth – and your ability to upgrade to a better or newer car. Cars that
are the best in their class and in popular demand are likely to have lower
depreciation.
Finally, before you buy, make a point of reading plenty of reviews; those written by
owners are invaluable and you'll find a wealth of these online, along with road
tests and car reviews written by professional motoring correspondents.
Finance and part-exchange
If you can't afford to buy your new car outright then you'll have a number of
finance options open to you including dealer finance schemes,
personal loans and car leasing.
In the past, one of the cheaper ways to finance the purchase of a new car was
to take out a low rate personal loan rather than use dealer finance; however
the current economic climate has seen lenders impose tougher terms and higher
rates.
If you do organise your finance independently of the dealer then the upside is
that you'll be in a better bargaining position when it comes to negotiating
the purchase price, however many franchised dealers are now offering low finance
rates or beneficial terms to attract new business in an idling market. Therefore,
the key to getting the best deal is to shop around and compare the different
options available to you.
Some dealers will accept part-exchanges, where a car dealer takes your existing
car for full or part payment towards another vehicle, but trade prices can be
significantly lower than if you opt to sell the vehicle privately. Dealers may
offer you a good price for your part-exchange vehicle and then refuse to knock
anything off the screen price of the new car, or knock a lot off the screen
price of the new car but offer a poor part exchange price. Try not to focus
too much on one price or the other and concentrate on the difference between
the two instead, as it is that figure that will determine just how much your
new car is going to cost you; the aim here is to make the gap between the
part-exchange and purchase price as small as possible.
If you can avoid part-exchanging your existing vehicle then you'll be in a much
better position to get the best deal on the price of your new car.
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