You could end up getting caught by a smooth talking salesman who signs you up for a glossy red sports car when you really need a family workhorse!
Are you going to be doing Starship Enterprise mileage? Or just short trips? Manual or automatic? Estate or saloon? Diesel or petrol?
The easiest and safest method is to sit down with all the family and discuss what the main criteria are. Make a list with two columns, “Must have” and “Would be nice”.
Now think about budget. How much you are prepared to pay for your desired choice of transport? Money for purchasing vehicles normally comes from three sources; Cash, finance and equity from an existing vehicle.
1. Cash. Some people are still under the impression that cold hard cash “talks” when buying from a dealership. However, the vast majority of honest traders, will not care how you pay, as it all goes through the books. For private purchases it is better to use cash and take the vehicle there and then, as cheques and some bankers drafts take time to clear.
2. Finance. This involves the dealer taking care of the purchase via the services of a finance company. Most big banks have a form of dealer finance department which makes the process quick and easy. The usual process involves placing a deposit and financing the balance, plus interest, over a given period of months. An important point here is to look at protecting your payments in the event of illness or being made redundant. Payment protection increases the monthly outlay; however it can really help in the event of a crisis!
3. Part exchange. This is a great idea if you hate trying to sell your old car yourself, however there are a number of points worth considering. Make sure you research how much your part exchange is worth. If you see your vehicle on a dealers forecourt up for £8000 do not assume that that is how much yours is worth. The dealer is running a business and must make a profit. He will have overheads and will have spent money on the vehicle to prepare it and make it safe. He must also warranty it for a three month period by law, so he is not going to give you forecourt price. Look at private advertisements in magazines such as Autotrader and then take some money off for negotiation. Go online and put your car details into Cap or Glasses guide, it will cost you a little money to do this but it’s worth it for the information you get. Both of these methods can give a general idea of the price you can get for your car.
Once you have decided on the type of car, the method of payment and if you are part exchanging your old vehicle it is now time to trawl the internet and look at as many dealerships as possible in your area. You may be prepared to travel three hundred miles to get the car of your dreams, but what if things go wrong, and you have to take the car in for the dealer to fix something?
Try to narrow your choice of possible candidate vehicles to around three, and visit them on the same day, if you spend too long looking, two things can happen. 1. By the time you return to buy the first car you viewed, it’s gone and 2. Your part exchange drops every month so you won’t have the buying power you thought you had!
Once you have chosen your prospective car, and negotiated the price, get it examined by either the AA or RAC, and obtain a copy of an HPI (Hire Purchase Investigation) to make certain there is no outstanding finance owed or the car has had major accident damage.