How to save money on a new car

Engine start buttonHaggling may not be your forte. But if the list price of your favourite new car is beyond your budget, don’t panic. There are plenty of other ways to keep costs down – especially if you’re prepared to do a bit of research, buy at the optimum time, and be flexible about the car’s final specification.

Our guide should arm you with all the tricks of the trade – and help you save money on your next car.

Buy an outgoing model


Last season’s clothes, mobile phones and even cars are often offered at a discounted price, to make room for new ranges about to be launched. Sales reps will therefore offer the best deals on a model that is set to be replaced, or even just updated, to buyers prepared to miss out on some of the latest gadgets.

Porsche showroom

Opting for the older version won’t necessarily mean driving home an ageing model, either. A facelift can sometimes mean little more than a new bumper or light cluster arrangement – something worth forgoing to shave a few thousand pounds off the price tag.

To take advantage of this discount window, you need to know when those new models are likely to be launched. Keeping your eye on the motoring press and websites is the best way to do this. Your local dealer may also be prepared to give you an idea of launch dates, if he/she thinks you’re planning to buy the latest model. So don’t be afraid to ask the question next time you’re in the showroom.

Buy at the end of the month


All dealers have sales targets. They’re usually incentivised to sell a certain number of cars each month, and those deadlines tend to come at month-end. So if you’re prepared to time your new car shopping until a day or two before, staff will be much more open to negotiating a discount to get that vital last-minute sale.

Car showroom

Consider a pre-registered car

Another way that dealers manage to their hit sales targets, is to buy unsold stock themselves, and register the cars in the dealer’s name. Any interested buyer would then effectively become the second owner, which could impact slightly on the future resale price. You’ll also lose a small portion of your warranty, as the clock starts ticking on that manufacturer guarantee the moment the car is registered.

However, if you’re prepared to stomach these minor inconveniences, you could save thousands on the list price of what is technically a used car, but effectively still brand-new, with just a few miles on the clock.

Don’t be too picky

If you’re hoping to bag a bargain, it’s worth relaxing any wish-list you have about your dream car’s final specification. A pre-registered car, for example, is one you’ll be buying off the shelf, and will therefore already be specced-up by the dealer. Yet many franchises will have car parks full of unregistered stock, which they’ll be keen to shift to make more room. So while you might have wanted gold metallic paint and a sunroof, is it enough of a deal-breaker to turn down a blue version without the skylight, in order to save a grand or two?

Car showroom

Don’t forget, you could also be save yourself months of waiting for the factory to produce the exact car you’re after.

Haggle on your trade-in

Negotiating a better deal on your own outgoing car is another easy way to reduce costs when swapping into a new model. This may simply be a question of researching your used car’s value thoroughly before you set foot on the dealer forecourt. Equally, don’t take the first estimate; get quotes from a number of dealers, then use the best price as a bargaining tool.

You could also consider selling your car privately first, as that’s likely to get you the best price, then using that extra cash on the deposit for your new car.

Car showroom

Shop around

Don’t assume that all franchised dealers will price their new models exactly the same. Sometimes it’s worth travelling beyond your doorstep for a better deal. For instance, larger forecourts out of town are likely to have a bigger pool of stock floating around, which makes it easier to pick up a bargain.

If you don’t want to travel, pick up the phone and chat to the sales staff of far-flung franchises – you’ll be surprised at the discount you can negotiate without even setting foot in a showroom.

Use online car brokers

If you really can’t stand the thought of haggling, let someone else do it for you! Online car brokers are meant to be experts in negotiating on your behalf. In reality, it’s the promise of attracting lots of new customers to dealers that enables the broker to get rock-bottom rates on your behalf.

New cars

Personalised brokers will take your wish list and use their contacts and industry know-how to try and find you a perfect match for the right price. Bigger brokerage firms, meanwhile, will take orders and ask a wide group of dealers to bid for your business. Those prepared to offer the lowest prices win. Either way, you shouldn’t have to pay a fee for the privilege. Reputable brokers will charge dealerships a small fee for bringing them customers.

Research the best finance deal

If you’ve decided to spread the cost of your new car, take some time to consider what type of finance contract you want. Most importantly, pay attention to the interest rates on offer – in particular the comparable APR, or annual percentage rate.

Manufacturers are increasingly advertising their new cars with the monthly payments to drive one home on a PCP (personal contract purchase) deal. But don’t be tempted to adopt the same mindset – in fact, never tell sales staff how much you’re hoping to spend each month! That’s because two cars attracting the same £250 monthly payment could represent very different value for money, if one is based on a low rate, and the other isn’t. Instead, say you’re looking for the lowest interest rates, and see which cars attract them.

Ferrari 488 Spider

Franchised dealers are likely to offer the lowest PCP rates – many even offer zero per cent deals -– as the credit is usually supplied by the finance arm of the car manufacturer. Independent dealers outsource their credit contracts to banks and supermarkets, whose rates tend to be higher. In both cases, the bigger your deposit, and the better your credit rating, the more competitive the rate will be.

Don’t forget to compare the PCP cost with a simple bank loan, too. While the rates may be higher, the car is yours from the outset, with no restrictions on mileage or wear and tear to worry about.

Downsize your car

Be honest. Do you really need a car that can wade waist-high in water and seat seven? If so, fine. But chances are, you simply haven’t stopped to question the groundswell of public opinion that big is best, when it comes to buying a car – or indeed a burger.

Car showroom

Consider instead that the next model lower down the range might not only be a better match with your lifestyle and needs, but also easier on the wallet. Smaller cars don’t just come with a more modest price tag. They tend to be lighter, too, and therefore better for the environment, as they boast lower CO2 emissions. They also need smaller engines to achieve the same performance, making them more efficient. So you’ll spend fewer pounds at the pumps. And if that doesn’t convince you, just think how much easier it’ll be to park if you live in town, or manoeuvre around those country lanes if you don’t.

You won’t necessarily have to forgo your luxuries either. In fact, it’s definitely worth considering the trade-off that comes with swapping an entry-level executive car, for a top-of-the-range family hatchback. Think of all the options you can tick…

Haggle for extras

Car showroom

If all else fails, and you haven’t managed to slice any money off the list price, don’t panic. You can always resort to nit-picking over the dealer-fit accessories. It may seem petty to scan the room frantically looking for goodies. But little optional extras like a set of floor mats, a boot liner or a European car kit are actually incredibly useful, and their cost can otherwise really add up.

So, ask the dealer to throw a few of these accessories in with the car. It’s an easy concession for the sales rep to make, if they want to seal the deal. And it has the added bonus of leaving you feeling slightly smug about your negotiation skills.

Read more: