GUIDE TO BUYING A NEW CAR
Buying a new car needn’t be a complicated process in which you sit for hours in a dealership wondering whether you’re really getting a good deal while you’re secretly confused by the salesman’s jargon. A new car is something to enjoy, so buying a new car shouldn’t be something to fear. That’s why we’ve put together this guide to help you buy a new car that’s right for you, at the cheapest available price.
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BUYING A NEW CAR - HOW TO GET STARTED
If you’re looking to buy a new car you shouldn’t rush down to the local dealership and see what they have on offer. Instead, you should do your research and make sure you are completely prepared. Here is a brief checklist of the steps you should follow:
- Don’t be desperate to buy – Don’t wait until your current vehicle is close to the scrapheap before you shop around for another. Give yourself time to research a new car and look around for the best deals. Of course, if you are in dire need of a new car at least don’t give that impression to the dealer!
- Know what you can afford – It might not be the most fun recommendation, but unfortunately not everyone can afford their dream car. Examine your financial situation closely and, assuming you’re not buying the car outright with a lump sum payment direct from your bank account, ask yourself how much you can afford to repay on a monthly or annual basis? Think about the running costs of the car too – prepare a budget for fuel costs, servicing and taxation. This should give you an honest perspective of what’s available to you.
- Get your credit rating – A credit profile is basically a financial analysis of you based on your reliability, if you pay bills on time, how you have repaid previous loans and credit cards, etc. It gives the financial companies some perspective on how much of a risk you are to them. They will always check your credit profile before offering you a deal and you should do the same. Contact a credit reference agency such as Experian or Equifax and familiarise yourself with your credit rating. Then if a dealer claims you have bad credit when in reality your credit is good, you will know to look elsewhere.
- Build your credit rating - Once you have retrieved your credit profile, you may find that your credit rating is only fair or poor. In this case it’s a good idea to try and build your credit rating before you buy. One way to do this is to take out a credit card and making the necessary repayments each month. Ensure that all of the household bills are in your name and that you are paying them off on time, and make sure your credit profile is up-to-date with the correct information about your address and employment. Your credit rating will be boosted if you have a fixed address and employment for more than six months and if you always make repayments on time. If you have poor credit and need a car quickly, ask your parents or a reliable family member or friend to co-sign on the car with you – this will help to boost your credit score but you must remember to make repayments on time or you will hurt your own credit rating and that of the co-signer.
- Can you put money down – Think if you can afford to put money down on your new car as this will greatly reduce the amount of interest you have to repay. You might want to offer your old vehicle as a trade-in – if this is your plan you might have to shop around for dealers that will accept a trade-in.
- Know what you want – Make the dealer work for you by knowing what you want ahead of time – and perhaps more importantly, know what you don’t want too. This means more than just having an idea of the model and colour of the vehicle you want – think about its specification too. Do you need air conditioning, for example? Would you feel lost without a CD player and how important is that sports suspension?
- Research the vehicle – Find out a standard price on the new car you want. You can do this by visiting online directories and car supermarkets. By searching for prices on thousands of vehicles that are the same make and model as the new car you want, you’ll be able to get a fair evaluation of the sort of price you should be expecting. Remember that most dealers will buy new cars in bulk, meaning they receive discounts from the manufacturers. Though they will understandably look to make some profit, some of this saving should be passed on to you, the consumer. So do your research to make sure you get it!
- Look for incentives – Many dealers will offer incentives and rebates as part of their negotiation process. Keep an eye open for these offers, particularly in December (when the market drops) February and August (the month before new registrations are introduced). Many analysts suggest that you should never pay the asking price on a new car – at the very least you should pick up some sort of freebie, whether it be road tax, insurance, fuel costs or a reduction in the overall cost of the vehicle.
- Shop around online – Dealers and brokers will generally offer cheaper new car prices through websites as they save on overheads. So make sure you scout around for the cheapest deals online. Even if you don’t want to buy a new car online, you can still take the quotes you receive into a dealership and ask them to beat that price.
Now you’re prepared we’ll go on to look at some top tips to help you save cash as you buy a new car.
Move on to part two of the guide to buying a new car…
