Buying a car in the UK: A complete guide

Tips for buying a new car

First, think about what you need the car for, how often you’re going to use it, the road types you’ll frequently use, and so on. This will help you narrow down your list of suitable cars.

For example, if you’re outdoorsy, have a large family, or regularly take long trips, you might lean towards an SUV. However, if you have a regular city centre commute, a smaller, more fuel-efficient option would likely serve you better.

It’s also worth considering where you want to shop when you’re buying a car in the UK. Today, there are more options at your disposal than you might think:

You can buy a car at auction, through classified websites, car supermarkets, and online car selling services. Alternatively, you can try a manufacturer, independent, or franchised dealership – or a car broker.

It’s also a good idea to pick three or four different cars and compare prices across all these types of sellers. This way, you’ll have a realistic price range in mind, which should help when it comes to making your final choice.

Next, it’s time to set a budget. From the research you’ve already done, you should have a rough idea of your target price range. Think carefully about whether you want to buy a used car or a new one, as this will have a bearing on your budget.

However, it’s important to remember that the price of the car itself is not the only consideration. You should also account for motoring expenses such as fuel, insurance, tax – and potential repair and maintenance costs.

It’s also worth reading some professional and consumer reviews for any models you’re interested in.

Motoring websites and magazines are great for expert reviews, market insights, and overall industry news, while forums are the best place to find honest discussions among ordinary drivers. You can also ask your own questions; these communities will usually be happy to advise on specific makes and models.

When is the best time to buy a car?

You might think the best time to buy a new car is whenever you want or need one, but you could end up paying far more than you need to with this approach. Shopping strategically can lead to significant savings, as there are great deals to be had at certain times of the year.

All dealerships have quarterly sales targets, in March, June, September, and December. If they don’t hit these targets, they don’t get their bonuses. So, they’re much more likely to offer enticing deals when these deadlines are approaching!

Don’t wait right until the end of the quarter though, as the dealers will be aiming to hit their targets a little sooner. Instead, try shopping a few weeks beforehand. Therefore, if you want to buy in the first quarter, you may have better luck in February or early March.

If you’re looking for a used car, you can secure big savings around March and September, when the new number plates are released. Many buyers wait for the models with new plates before trading in their old cars. So, these months are traditionally when dealerships are flooded with extra stock (both new and used).

Dealers tend to cut the prices of part-exchanged models in February and August to clear some space (and in March and September, when the new plates have arrived).

It’s also worth bearing in mind that prices for different car types peak at different times of the year. This is known as seasonality:

• Convertibles are generally cheaper during the winter, as fewer buyers are thinking about top-down motoring.
• SUVs, 4x4s, and MPVs show off their capabilities in cold, wintery conditions. As such, they’re usually cheaper to buy in the summer due to lower demand.

How to negotiate the best price on your new car

The thought of haggling can be off-putting, yet a little savvy negotiation could save you hundreds, if not thousands of pounds when you’re buying a car in the UK. The bottom line is, most sellers expect you to negotiate - and won’t be offended, as long as you do so politely!

Here are a few pointers to help ensure your negotiation goes smoothly:

• Set a firm budget - It’s easy to end up spending more than you intended, especially if you’re dealing with someone who persuades and sells for a living. However, if you have a fixed price in mind that you know you’re not prepared to go over, this should stand you in good stead. Just don’t betray your limit to the salesperson.

• Do your homework - Carry out some research on the car(s) you’re interested in. Remember not to focus solely on price. Consider performance and potential issues as well. Having some facts and figures in your pocket will show the dealer that you know what you’re talking about – and puts you in a stronger position to negotiate.

• Understand financial incentives - Learning as much you can about dealers’ financial incentives can also help with haggling. All dealers have these, whether they’re based on selling a specific model or a certain volume of vehicles (which is often linked to certain times of year as we covered earlier).

  Try looking at manufacturers’ websites, motoring websites, magazines and online forums to figure out what these incentives are. You can also ask the dealers directly. However you come by the information, it can help you negotiate prices right down as you’ll know when (and on which models) dealers are likely to be most flexible!

• Explore the market - Shopping around can be another useful way to secure bigger discounts. Salespeople are competitive, so if you can show them that another dealer is offering a lower price on the same model (or a similar one), this can work in your favour.

  Don’t stop with the price of the car itself. If a dealer can’t budge on the price, they may be able to offer sweeteners such as sat navs, mats, and warranties free of charge to make a more compelling offer.

  Finally, be prepared to leave if you’re not getting anywhere. Unless the car you’re after is only available from this one seller and nowhere else – which is unlikely – you may have better luck elsewhere.

  Discover more tips on how to haggle.

Car finance explained

If you don’t have the cash to buy a car in the UK outright, it’s important to familiarise yourself with the different car finance options:

Personal contract purchase (PCP)

With a personal contract purchase (PCP) plan, you pay a deposit and make relatively low monthly payments - usually for 2-4 years. After that, you get three options:

• Trade the car in for another model.
• Hand it back.
• Buy the car by making a ‘balloon payment’.

A balloon payment is usually a large sum of money that is agreed at the start of the contract. It represents the difference in value between when you got the car and its resale value at the end of the contract.

If you do return the car, you may have to pay mileage charges if you’ve gone over the agreed limit. You may also be liable to pay for any damages. A PCP plan is probably the best option for you if you want lower monthly payments, don’t tend to burn up the miles every year - and want a flexible contract that lets you choose what to do at the end of it.

Hire Purchase (HP)

When you buy a car through a HP plan, you also pay a deposit and monthly payments, which tend to be higher than with a PCP contract. At the end of the contract, the car is yours – and there isn’t an option to give it back or trade it in.

HP is a good choice if you just want a simple contract, can afford to make pay higher monthly payments, don’t want any mileage restrictions, and want to own the car outright at the end of the term.

Personal loans

There are plenty of banks and other financial institutions that can provide you with a loan to cover the cost of a new car. However, your options might be more limited if you have a lower credit score.

Make sure you compare quotes from as many providers as possible before you make your decision, paying particular attention to interest rates. Personal loans are a good option if you want to buy your car outright and have a good credit rating.

Deciding on the right finance option

Need help deciding on the best finance option for your circumstances before buying a car in the UK? Try using our car finance calculator.

You can find out how much you’ll be paying each month, how APR affects the total cost of your loan – and the best type of finance for your requirements.

Pre-purchase checks

There are several checks that you should carry out before committing to buying a car:

• Take the car for a test drive and pay attention to how it handles at different speeds and on different road surfaces.

• Check the steering, acceleration, brakes, and overall responsiveness. Listen out for any unusual noises. Make sure you’re happy with the controls too; check everything is working properly – and that you’re comfortable.

• Inspect the interior and exterior carefully, looking for any signs of damage. This includes tyres, body panels, upholstery, lights, and so on.

• If you’re looking at a used car, you should also run a vehicle history check. Various websites offer these reports for a small fee. They’ll give you essential information about the car’s background, including owner and mileage history, whether it’s been stolen, whether it’s been in an accident, and if there’s any outstanding finance. Ask to see the V5C logbook and service history too.

Whilst you can do many of these checks yourself, it’s worth considering asking a professional to carry out pre-purchase checks on your behalf – especially if you’re a first-time buyer.

Many providers offer pre-purchase inspections for a fee, which range from basic to advanced. These checks should unearth any issues with the car and can prove invaluable insights, saving you money on repairs - and giving you more leverage to negotiate with the seller.

Avoiding common pitfalls when buying a car

Buying a car in the UK can be exciting, but it’s important to navigate the market carefully to avoid making a costly error.

For example, many first-time buyers see a car’s price as standalone - and forget about all the other costs that go with it, such as fuel, maintenance, repairs, tax, insurance, congestion charges - and even parking. All these factors can add a huge sum on top of the price of the car itself. So, you need to take them into consideration when setting your budget.

When utilising finance options, many buyers fail to read the small print. Whilst reading all those terms and conditions can be tiresome, it will ensure that you fully understand what you’re signing up for. Otherwise, you could discover you’ve committed to paying higher fees or interest rates than you expected.

Finally, don’t be tempted to rush. Depending on where you’re buying from, you may be feeling pressured to make a decision. Just remember that you can take as much time as you need, even if a salesperson is trying to tempt you with a time limited offer.

The most important thing is that you buy a new car that you’re really happy with – and don’t overstretch yourself financially.