Acquiring a New Car
The motor industry is currently doing very well for itself. Year-on-year the industry has been pulling itself free from the recession of 2008, with more motorists choosing to buy a new vehicle in recent years. In 2012, Sky report how new UK car registrations were up 5% from the previous year, which was the biggest increase since 2001.
If you’re looking for a new car, there are a few options to consider. Although we feel leasing your car is the optimal way to save money, whilst enjoying a modern vehicle, it’s certainly worth discussing your other options.
The Benefits of Buying a New Car
As demonstrated by the statistics above, new car sales have certainly been on the rise in recent years and more motorists are coming around to the idea of owning a brand new vehicle.
Of course, one of the biggest reasons to invest in a new car is that you’ll have the opportunity to pick the exact specification you want. It has become a lot easier to research various manufacturers and models, before selecting the car most appropriate to your lifestyle. AutoTrader’s review section allows you to find out more on every manufacturer going, giving you an opportunity to buy with confidence.
Another solid benefit to buying new is you can enjoy a manufacturer’s warranty. The manufacturer warranty will cover your vehicle for a certain period, up to and over seven years in some cases. Which? also explain how Vauxhall offer a ‘lifetime’ warranty. On top of this, you aren’t required to MOT the vehicle for the first 36 months.
Then, you have the convenience of not worrying about the car’s history. Whilst service and MOT documents can provide information for a used car, there’s always the risk of something going wrong. A brand new car eliminates this worry.
New cars are also much more fuel economic, giving you the opportunity to save a small fortune at the petrol station. Modern vehicles are equipped with the latest safety technology too, ensuring your journeys are completed in a safe manner.
Buying a car vs. leasing a car
When leasing a car you’ll need a down payment. In layman’s terms, this is a deposit, except you won’t receive the money back at the end of the contract. The down payment is calculated as a certain number of monthly rental payments. The Telegraph says that by increasing your initial down payment, you’ll lower monthly fees.
A Mercedes C-Class Sport Saloon over 24 months will require a down payment of £2,293.20. Monthly payments are then made of £254.80. You’ll be limited to 10,000 miles each year and must also pay an arrangement fee of £230.
Over 24 months, you’ll pay a total of £8,383.60.
Buying the same Mercedes C-Class Sport Saloon upfront will cost £33,000. Take into account the AA’s estimates of 20% annual depreciation.
Over 24 months, the vehicle will have cost you £11,480.
Buying a used car
The Guardian report that total car sales in 2013 jumped 11% to 2.26m. What’s the reason for this? Well, largely because they’re much cheaper and you can enjoy a greater selection of choice.
With used vehicles, you’ll also avoid the financial hit from depreciation. According to the Money Advice Service statistics, driving a new car off the forecourt can depreciate its value by as much as 35% in the first year and 50% in the first three years. This is a huge amount. This is your opportunity to get a three-year-old vehicle at just the fraction of the cost you would have paid at the time.
These same cars could still have a number of years left on the manufacturer’s warranty because as discussed above, these warranties can be effective for up to and over seven years. This warranty provides extra protection and peace of mind that if something did go wrong; you won’t have to fork out.
If you’re interested in buying a used car, it’s also worth noting that you’ll pick up a better deal by shopping from private sellers. However, this can be a risky approach as the law isn’t on the buyer’s side should a fault occur later down the line.
Dealers will bump up the price of a vehicle and surprisingly, ‘clocking’ still occurs to this day. This is when the mileage is tampered with to give an impression it has journeyed fewer miles.
Buying from a Private Seller
When buying a used car, there are two options for you to consider; buying from a private seller or buying from trade. Everyone has their own opinion of which is best, but realistically both are suitable as long as you know what to be on the lookout for.
Buying from a private seller is likely to save you money. However, the fact remains that you have less legal comeback should a fault develop with the car, as explained by Citizen’s Advice. This is the complete opposite to when buying from a dealer.
A car sold in the trade must have undergone a series of tests to ensure its roadworthiness. You’ll then be covered by the Sale of Goods Act. Private sellers aren’t legally obliged to operate in the same way. Their only obligation is to be truthful on the car’s condition. Even if they’re not, receiving the compensation you deserve can be both difficult and time-consuming.
For this reason, it has become common for dealers to pose as private sellers, in order to avoid certain rights when selling a faulty car.
Buying from a Trade Seller
Whichever car you’re interested in buying, the advice is not to sign any documentation or hand over money until you’re 100% happy. With millions of used cars sold on an annual basis, you’ll find a similar car elsewhere if something doesn’t quite add up.
When purchasing a used car from a trade seller, you will have more rights than when buying privately. As well as this, car dealers are required to test the vehicle before selling and check the recorded mileage. You can file a report to Trading Standards if you come across anything suspicious.
Fortunately, when buying from the trade industry you’ll be covered by the Sale of Goods Act. This specifies a vehicle must be:
- Of satisfactory quality
- Fit for purpose
- As described.
As you would expect, the dealer will also need the legal right to sell the car and must fix any problems that present themselves within a reasonable time. If a fault develops, the vehicle wouldn’t have been of satisfactory quality. This wouldn’t cover wear and tear or if the fault was pointed out before sale.
Any car dealer must also comply with Consumer Protection from Unfair Trading Regulations (2008). This prevents dealers from:
- Giving false information: This includes misrepresenting the vehicle at any time during the transaction.
- Giving insufficient information: Not disclosing crucial elements of a vehicle, including its mechanical health, history or mileage.
- Acting aggressively: This includes high-pressure sales techniques to sell a vehicle or associated finance packages.