Buying a new car is certainly an exciting prospect. But with so many cars, deals and dealers to contend with, how can you be sure you’re getting a good deal? Never fear. We’re here to take you through some important things to consider when finding the best deal on a new car.
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Avoid buying the wrong car
Car dealers will use honeyed words to convince you to buy any car, especially one that might be more expensive than your budget. That’s why it might be in your best interest to identify the car that’s right for your needs before heading to the dealership.
This means considering the features of a car and how they will help you achieve your car needs. Even though we might all want a beautiful car that turns heads when we pull up in driveways and parking lots, it might be wise to consider the car’s more practical features first.
How do you choose the right car?
A simple Google search can present you with different types of cars. For example, if you are looking for a car that can be used comfortably off-road, a search like “best off-road cars in the UK” should reveal a range of different car names and images.
Check out what people who own or know about the cars you find in your Google search say about them. Reliable sources for such information are popular car forums. Visit forums like Honest John and Piston Heads.
The information you find in the car forums will likely help you choose the right car, making it easier to avoid the sweet words of a car dealer changing your mind.
Finding the best deal on a new car
Check the recommended retail price (RRP)
RRP is the price at which car manufacturers recommend a car dealer sells a new car. It can be found on the car manufacturer’s website. The price may also be referred to as the manufacturer’s suggested retail price (MSRP) or suggested retail price (SRP).
It is important to keep this price in mind to help you identify instances where a car dealer may have quoted an unreasonably high price.
What is the cheapest month to buy a new car?
Particular months are believed to be the best times to find the best deals on new cars:
- February, May, August and November – more often than not, car dealers are awarded bonuses at the end of each quarter, in March, June, September and December. Targeting the month that comes immediately before these milestones may help you get a great deal. Dealers may be more desperate to get sales that help them hit their targets.
- Before 6 April – this is the end of the financial year, and car dealers might be aiming to get the most out of the year. Also, new number plates come out at the beginning of March and September. This makes February and August particularly good months to get the best deal on a new car.
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Buying a new car with cash
Buying a new car with cash is straightforward. However, negotiate the price to get a fair deal, no matter how long it takes. Be calm and patient. Remember that you already know the RRP, and haggle keeping that in mind.
Buying a new car through car finance
To find the best deal on a new car, it’s useful to understand the meaning of APR (annual percentage rate), interest rates, incentives and rebates.
Avoid getting into deals that look good on paper without considering reality. Take time to understand what it means when a new car dealer offers 0% APR. Also, understand how rebates and incentives offered by car financing institutions benefit you. Some calculations might be required.
The steps:
- Identify the retail price indicated by the car dealer.
- Determine what percentage you could negotiate off this price. That’s right. Even if you’re being financed, try and get the price lower.
- Consider and compare the car finance deals offered by your car dealer and various financial institutions.
- If you are not good at making financial calculations and decisions, have someone who understands the financial implications and commitments of car finance with you.
- Aim to get into a new car purchase deal that:
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- You’re eligible for based on your credit score
- Ensures your car doesn’t enter negative equity during or at the end of the financing period
- Allows you to put down at least a 20% deposit to off-set depreciation
- Has a loan repayment period that’s five years or less
Don’t forget that a car has expenses, and they can affect your ability to keep up with monthly payments. Delays in monthly payments can result in penalties.
