With car sales figures down considerably over the past few months, most new car dealers will be looking forward to the plate change, hoping customers will be lured in by the appeal of a new ‘09’ plate motor. We guide you through the minefield that is buying a new car
There’s nothing more satisfying than spending money on a new acquisition, however large or small that may be, and top of the list must be buying a new car. Traditionally, the change of registration plate used to be in August of each year, but that all changed back in 1998, when it was moved to September. Everything was changed again in 2001 when the UK moved to two plate changes every year, designed to spread new car sales peaks out a bit. It doesn’t seem that long ago since the last new registration special in What Diesel, back in the September 2008 issue, however, the ‘09’ plate change is almost upon us. Assuming you’ve got the nerve to fork out for a new car while in this recession, read our guide to the do’s and don’ts for buying your shiny new reg car.
Do you really need an ’09′ plate, or will a ’58’ pre-registered car do?
It’s always nice to be the first person in the street to own the new plate car, but is it really necessary? If you don’t already know, most dealers work on a bonus structure, whereby they need to hit targets. Often when they are only one or two cars short to get a sizeable wedge from the manufacturer for hitting target, they will register a few cars to themselves. They then sell them on at a sizeable discount to punters that aren’t concerned that they aren’t the first owner on the logbook.
This is the best way of securing a mega discount on your new car. The downsides to this kind of purchase is that you are the second owner, and that you don’t have the choice of colour or options that you would normally have if you were placing a factory order. These are small issues that pale into insignificance when you understand how much you can actually save. For instance a national dealer group has been advertising a 2008 (58 reg) Peugeot 207 GT HDi 110 for £11,540 – a saving of £4,045 off the new price. And there’s another, advertising a 2009 (58 plate) Kia Sorento 2.5 CRDi XS automatic for £17,630, saving £6,610.
Do your research
It’s very easy to overlook the simple question – what kind of car do I need? But by asking yourself what the car will be used for, and by how many people, you can stop yourself pouring money down the drain. There’s no point in buying a car that is bigger than you need, and be firm with any salesmen who will try to upsell you into a bigger, and more expensive car. A vehicle with a large engine is no good if you spend all of your time in traffic in the city, and similarly a supermini with a diminutive engine won’t be at its best on the motorway. Take a good hard look at your lifestyle and make a decision accordingly.
Before you even go to look around at cars, draw up a shortlist of half a dozen cars that you like the sound of. Check the dieselfiles at the back of What Diesel, where we list every single new diesel car available on the UK market. Uniquely, we also give you the data for both manual and automatic gearboxes – something that other car magazines don’t offer.
What specification should I go for?
This is the ultimate quandary, as there are so many different choices out there. And that is even before you start thinking about colours or factory fitted options. Depending on how long you are thinking of keeping the car, will depend on how lavish you want to go, and some factory fitted options and colours will hold their value better than others.
The rule of thumb when choosing the colour of your new car, is to stick to something tasteful that would appeal to the masses. That metallic orange may appear stunning to you, but may put future buyers off and look dated in years to come, and thus make your car more difficult to sell. It’s best to stick to metallic paint in more sober colours, as they will be the ones that buyers will be looking for when the times comes to sell.
Very few options are worth the high original purchase price when it comes to resale time, in fact it is best to expect no return whatsoever. Though with some cars, not choosing some options could turn the tables on you instead, and not having that vital piece of equipment may well mean that your car is worth less than other examples around. For instance, leather upholstery is essential on an executive express, but isn’t worth a penny extra on a supermini. And there’s satellite navigation. Yes it looks neat when integrated into the dashboard, but really isn’t worth the extra couple of grand that it could cost. Better value is found with the portable units costing a few hundred pounds. You could upgrade to a new unit every year for less money that it would cost to have factory fitted satellite navigation.
With times hard, car makers look at ever more innovative ways to make their cars more appealing. One of these is to create special edition models, loaded with extra equipment. Some are good value, some not so good. See the table over the page for What Diesels rundown on some of the current special edition deals available.
Work out your finances
Calculate how much you have to spend and stick to it. Take into account the cost of things like vehicle excise duty (VED), fuel, insurance and servicing. To help out in the future, it’s always best to choose a car that has a good resale value. That way, when you come to buy your next car, you’ll be in a better financial position when it comes to funding your next purchase. If you fancy a car that doesn’t offer such good values, make sure you negotiate a hefty discount, so that you can offset some of the losses that you’ll inevitably suffer later on.
How much is your part exchange worth?
It always surprises me how many people don’t do their homework. Buyers expect top money for their old car, but do none of the hard work to get it. Never get your car valued on a whim, always prepare. Spend a day cleaning and valeting it, so that it looks its best. You’ll be amazed at how much difference it makes to the trade-in value offered by the garage. If you have time, try to sell your car privately, as you’ll get more for it than you would if a dealer buys it from you. This may mean a day or so meeting and greeting punters looking at your car, but it may mean that you get several hundred pounds more for your old car. It can be worth the anguish and pain.
If you are trading the car in, make sure that you have all your old service history and MoT’s with you, so you can show the dealer that you have looked after the car and had it properly maintained. A dealer will take any opportunity to knock down your part-exchange price if anything is looking amiss. Don’t let them do that to you, so prepare, prepare, prepare.
The test drive
Before you agree to buy your new car, always take it for a test run. Make sure that it is longer than a quick lap around the block, even though the salesman will be keen for you only to do a few miles. It’s in his interests to get back to the dealer quickly so you can’t find any downsides. If possible, drive it along a route that you know so that you can compare it to your existing car – that way, it should show up any deficiencies. Also, drive on as many varied roads as possible, including heavy traffic. This will show up a heavy clutch or awkward gear change. Remember that this is your time, and drive for as long as you need to feel comfortable with your purchase. Some dealers offer the opportunity to borrow the car for 24 hours or even a weekend, so always ask if it’s available – there is no better way to suss out a potential new buy.
Negotiating the best price
Once you have settled on the car that you want, you’ll need to get down to the nitty gritty, and start negotiating with the salesman. They will employ all kinds of tactics to try and get you to buy, but don’t be bullied. If something doesn’t sound right, it probably isn’t, so walk away. There are plenty of other dealers that can, and will sell you a similar car. Many salesman will say that the deal is only available that day to pressurise you into signing on the dotted line. Don’t believe them, it is just sales patter, and will be available the day after, once you’ve had time to think it through. Never buy a car in a pressurised environment, always make a decision in the cold light of day.
Most dealers have sales targets and will be eager to meet these targets. Usually at the end of the month they will be running close and will want to sign that extra deal to ensure that their fat bonus is paid. Therefore, extra special deals may be able to be negotiated, so push them hard. They won’t want to miss out, just because of a few measly quid.
All sales staff will know what margins they have in the car. This is the amount of discount that is available in the vehicle, before it starts making a loss. Don’t fall for the ‘I need to ask my sales manager’ trick, as many employ this to stop you from haggling too hard. Work out how much you want to pay for the car and stick to it. Be prepared to get up and walk away, as if that dealer won’t cut you your deal, another will do. And don’t be afraid to play one dealer off against another, it’s just business.
If you’re trading in your current car, the important figure is the ‘cost to change’ amount. This is the amount you have to pay the dealer before you can drive away with your shiny new car. For instance, one dealer may offer you a fantastic trade-in price, but no discount off the new car, but another a mediocre trade-in but fantastic discount. The only way you can compare these two deals is by assessing how much you need to pay out. This is known as the cost to change figure, and is the only amount you should be concerned with. That’s not to say that you can’t use a high trade-in figure or high discount to further your negotiations by playing one dealer off against another.
Very often, when you have reached stalemate on the price, the salesman will be able to throw in freebies, instead of lowering the price any further. So ask for a full tank of fuel, extra warranty or car mats. These things may seem like small items, but they cost the dealer virtually nothing and are all extras on top of the price that you’ve already negotiated. If you are ordering a car from the factory, ask the salesman to throw in a free option or two, you’ll be surprised at how easily they will agree. They would rather do this, than see you walk away. But be reasonable, everyone has their limits.
Financing your new car
It’s important that you know what the rate of interest you are paying, so ask what the APR (annual percentage rate) is. Even if you have cash in the bank, if there is a zero per cent finance deal on the table, it may be better for you to leave your cash in the bank where it is earning interest, than paying for your new car immediately. As you would shop around for the purchase price of your new car, do the same with finance. It is amazing how interest rates can come crashing down with a bit of negotiation. Rates are always up for discussion, and don’t forget that the salesman will get a commission for every finance deal he does, so that’s more money in the pot he can give away. And don’t discount the idea of remortgaging your house to finance your new car. With interest rates as low as they are, it is a very real credible option. Just bear in mind that you need to set the term of years of the loan to a reasonable level, otherwise it can turn into a rather expensive purchase.
My advice would be not to borrow the additional funds any longer than you would want a car loan to go on for – three or four years maximum. Before you sign the paperwork, make sure that you know what you are signing for. Read the entire contract, including the small print, and make sure that if there are any important conditions, like delivery times or if the sale is subject to a test drive at a later date, that these conditions are listed on the order form, and signed by both parties. That way, you will have come back, should something go awry.
Collecting your new car
It’s always an exciting time, picking up your new baby, so don’t get overwhelmed and miss out on any of the finer details. Make sure that you have everything ready well in advance, and if you are trading your old car in, ensure that you have all of the documents that the dealer will need.
If possible, take a cool-headed friend along with you, and task them to be critical and to ensure that everything is as it should be. Whilst you are signing the documents, they can be scrutinising your new car to make sure that it is as agreed. Check for scratches, dents and problems, and it’s important to ensure you go over it with a fine toothcomb, because as soon as you drive out of the garage, it will be your word against theirs. Check all of the paperwork to satisfy yourself that you have got exactly what you have paid for. And remember, if anything is amiss, report it immediately and ask them firmly, but friendly, as to how they are going to resolve the predicament.
Lastly, enjoy your new car. It’s the second biggest purchase after your house, so it needs to be right.