When it comes to buying a new car the potential
savings on offer can be huge. We guide you through the various buying options -
brokers, finance, pre-reg models - to help you get the most for your money
Dealer finance
Buying on finance shouldn’t prevent you from demanding a
great deal. The best bargains require you to haggle, but while this can be
complex with finance, you should emerge with significant savings in your pocket
if you do your homework.
Driving a hard bargain isn't just about
knocking down the initial price of your desired car - it's about making your
money go further, whether it's getting valuable optional extras thrown in for
free, or getting a better deal on finance itself.
There is the sheer number of variables, including the APR
(annual percentage rate of interest), the size of your deposit and monthly
savings, the length of the contract, whether there are any special deals
available such as a deposit contribution or free servicing, and how much you
can haggle.
The fact that there is room for negotiation means you should
never declare your intention to buy on finance up front. Some dealers will
argue that the price of the car needs to accommodate the finance deal, so it's
far better to haggle on the finance once you’ve already secured the price of
the car. For example, many dealers will offer o% APR finance only on a
pre-haggled price; others will move the terms according to factors such as the
deposit you offer or the level of APR you pay.
Weighing up the true value of a deal is difficult when all
of the incentives are thrown in, but the best benchmark is always the total
amount payable, which a dealer is legally obliged to provide you with before
you commit lo buy.
Haggle with confidence
·
Preparation
Knowing exactly the car model or finance
package you want - and why - plus the best prices available elsewhere, will
give you confidence to stand your ground
o
Time it right
Many sales targets are totted up at the end
of the month, so salespeople can be willing to drop prices if you buy at this
time
Many
sales targets are totted up at the end of the month, so salespeople can be
willing to drop prices if you buy at this time
·
Discounts
If the dealer can take money off the basic
car, they can discount most options by the same amount
·
Keep your part-ex separate
Ask for separate negotiations on your new
car and part-ex prices to prevent the dealer offsetting them
·
Beware of special offers
Ask what’s involved in any ‘special' offer
so you don’t end up out of pocket
Pre-registered cars
Pre registered or 'pre reg’ cars are, in effect brand new,
but you won’t be the first owner of the vehicle. When dealers want to meet the
sales target they’ve been set by the manufacturers -and get the bonuses - they
register the cars themselves, then sell them on as quickly as possible, often
for a discount. There's no precise definition of the difference between a
‘nearly new’ car and a 'pre-reg' one, but we’d suggest that to count as
pre-registered, the car needs to be less than six months old and have fewer
than 100 miles on the clock; single-digit mileages are quite common.
Pre-reg cars are, by definition, almost always in stock, so
you won't have to wait for delivery. You may have to settle for a car that’s
not in your precise specification, though.
Always ask if the car has been pre-registered. The dealer is
obliged to tell you the truth but only if you ask the question.
Make sure the dealer registers the car to you on the day
that you collect it - rather than registering it to a fleet or a company first,
to try to get an additional bonus.
Remember that when you come to sell the car on, yours will
not be the first name on the V5C registration document. However, this normally
isn’t a problem if you explain to your buyer that the car was a pre-reg and
that the dealer was the first owner.
“There is now a
growing risk of oversupply among younger cars as many manufacturers continue to
pursue dealer self-registrations or ‘short cycle’ rental business as ways to
gain market share. The fear is oversupply among nearly-new cars may ‘ripple
down’ through the other age bands as older cars devalue to remain competitive
on the forecourt.”
When buying a car you should always be
prepared to haggle, because there’s almost always a discount to be had. You can
judge just how hard to push it by comparing Target Price and broker deals, but
even then don’t be too timid to aim even lower.
