Every day, millions of individuals rely on their cars for various reasons, including commuting to and from work, family obligations, and everything in between. Cars are often our second-largest capital expenditure after our homes. Yet, many people spend thousands of pounds more than they need to when purchasing a car, resulting in a significant financial loss. Purchasing a new car is a huge financial choice – one that is made much more crucial when you have the luxury of planning out your car purchase in advance. It’s important not to overpay for your future vehicle.
These days you can easily opt for a car on finance with no deposit and save on your costs. Keep the following suggestions in mind when making your next car purchase to save money, regardless of what you’re looking to buy.
A car salesperson is skilled at persuading individuals to spend more money than they had anticipated by encouraging them to buy a slightly nicer model with a few additional features here and there. If you plan ahead of time and create a budget, you will be more prepared for price discussions and will be more likely to avoid overpaying.
Determine if You Need a New Car
It is tough to save money when you are buying a new car. Question yourself, do you truly require a vehicle that has just been pulled from a production line?
A new car loses over half of its value in the first three years, and others depreciate even more quickly, becoming worth only a quarter or even a fifth of what they were purchased for when they were new. That’s a significant amount of money to lose on such a costly buy.
A one or two-year-old vehicle or an ex-demo car will be significantly more affordable than purchasing a brand new vehicle.
Choose Vehicle Models That Have a Longer Life Span
As mentioned above, the decline in the value of your car over time is typically the most significant expense.
Some models lose value more quickly than others, resulting in a lower selling price when you decide to sell. Several other parameters on a regular vehicle could cause them to be more expensive – and choosing the specs listed below can make your car finance much more affordable.
- Smaller engines
- Cars that run on petrol rather than diesel
- Manual over automatic
- Preference for hybrids over conventional varieties
- Fewer CO2 emissions
Therefore, do your homework on different car models and their value before shopping, especially if you plan to sell after a few years.
Car dealerships can offer pre-registered vehicles at a heavy discount because the dealership purchased these vehicles up to 6 months before meeting a specific sales quota.
Because these vehicles have technically had a previous owner, they are classified as used vehicles, although they are brand new. Even better, because the car dealership has already met its sales quota, you will be able to drive an even harder bargain on these automobiles. All you have to do to find out more is inquire about availability with the dealer.
While they are essentially brand new, they are far less expensive because they are not fresh out of the factory. Again, the dealers will be seeking to offload them, putting you in a strong position to bargain aggressively on the price.
Purchase at the Right Time
In the case of private sellers, the time of year may have little influence; however, second-hand automobile dealers have quarterly targets to reach and bonuses to be won in exchange for meeting those targets. This means that dealers may be more willing to discount a few hundred pounds off the asking price around the end of March, June, September, and December to close the transaction, or they may include some optional features for free to sweeten the deal.
Select a Quiet Day to Buy
There is a stampede of people who rush to auto dealerships to purchase a new vehicle immediately after payday. With so many potential customers, salespeople are less likely to provide discounts. Typically, avoid purchasing a car on a weekend when everyone else does. The fewer people there are at the dealership, the more opportunities for discounts or better financing offers.
Purchase an ‘Old Plate’
If you want a nearly new car but aren’t concerned about having the most up-to-date registration on your vehicle, then there may be a good deal to be had on an ‘older’ model once the plates have been switched to the new ones.
People who pay full price for new cars want a new registration on the vehicle. Therefore if you are willing to take an older registration, you may be able to save a large amount of money the week after the new registrations go live, which occurs in March and September, respectively.
Make a Part-Exchange With a Car That Is in Good Working Order
If you part-exchange your current vehicle, the money you get can be applied toward purchasing your new one. Selling your vehicle privately will always result in a better price than selling your vehicle through a dealership.
Ideally, your car should be in good condition, and it may be useful to repair any minor dents and scratches right away to avoid losing money.
Better Credit Ratings Result in Lower Interest Rates
In general, the better your credit score, the better interest rates you should be able to secure on a car loan.
Pay Off Your Car Loan as Soon as Possible
A 3- or 4-year auto loan means you are essentially ‘borrowing’ the car for an extended time, and interest accrues over time. You will save money on interest if you pay off your car loan early.
Having a persistent suspicion that you’ve been duped as you drive away in your newly purchased vehicle is the last thing you need. By following the tips above, you can save a great deal when purchasing a car.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.