How to save money when buying a new car

How to save money on a new car

Buying a new car can be a tricky business. Your mission is to get as much car for as little money as possible, while getting as much out of the seller as you can. Thankfully, there are plenty of ways you can save money, meaning you can buy a new car for less.

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

What you buy

How to save money on a new car

Downsize what you’re buying

The best way to save money on a new car is to be sure that the car you want is also the car you need. Is a Mercedes E-Class really necessary, or could you get just as much out of the smaller but still-cool C-Class? Is a Golf really a must-have motor, or could you live with a Polo and save a mint? 

Smaller cars don’t just come with a more modest price tag. They tend to be lighter, with smaller engines, increased fuel economy and lower CO2 emissions. 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. That Polo can come with pretty well all the toys that the big E-Class does. Just tick the right boxes on the order form. Think long and hard about exactly why you’re getting that bigger pricier model.

How to save money on a new car

Buy an outgoing model

Look closely at the cars you’re considering. Different cars at different phases in the life cycles will have different deals on them. Could you save money by buying a car that’s near the end of its life on sale? Absolutely, because sales reps will offer the best deals on a model that is set to be replaced, or even just updated, so keep an eye on what cars are due out and when.

Consider a pre-registered car

Another way that dealers manage to hit sales targets is to buy unsold stock themselves, and register the cars in the dealer’s name. An 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.

Car showroom

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 some serious money? Buying existing stock means you’ll get it sooner, too…

Car showroom

Haggle over extras

That said, you can use the absence of equipment as a great haggling point. If it doesn’t have adaptive cruise control, could it be a deal-breaker? As far as that salesman is concerned, it should be. Get them to lop money off at the last hurdle, to get that sale over the line.

Similarly, you can barter for service and care packages, as well as dealer-fitment extras. 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.

How to buy

New cars

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.

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, out of town forecourts are likely to have a larger pool of stock floating around, which makes it easier to save money with a bargain.

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.

Ferrari 488 Spider

Finance, PCP or HP: research the best deals

Finance, PCP, hire purchase – the range of finance options can seem a bit daunting. If you’re not buying your car the good old-fashioned way (outright), it’s a realm of unknowns and potential savings. Pay attention to interest rates. Look at deposit contributions. Is a certain marque offering a good deal on scrappage? 

Play your cards close to your chest, and keep your budget to yourself. Give the salesman a ballpark and make them work for a rock-bottom price. 

Car showroom

Franchised dealers are likely to offer the lowest PCP rates – many even offer zero percent 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.

Car showroom

Haggle on your trade-in

Sentiment is a great weapon in a car buyer’s arsenal if they’re trading in. “I can’t let it go for that”. “It’s worth more to me”. Both brilliant expressions that could get the dealer to give you more for yours, or make you pay less for theirs. Research your car’s value, and then push for more.

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.

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