Drive a hard bargain on new cars and car finance

Mon, 05 Sep 2005



Last weekend would have been a busy time for car showrooms with would be buyers after the launch of the new ‘55’ car registration plates.

March saw sales of the ‘05’ registration reach 440,000 and it is estimated that sales this month will reach similar numbers.

The cost of running a car is rising. According to the Office of National Statistics costs have doubled in the last ten years, with the price of petrol at its highest levels, insurance premiums increasing and high costs of servicing and repairs.

The average cost of running a car is now £2,053 according to Sainsbury’s Bank. This amount can be broken down into £458.92 on insurance, £250 on servicing, £40.75 on MOT’s, £118.73 on car tax, £80 for breakdown cover and £1,104.90 on petrol.

As costs are rising, motorists are trying to find ways of reducing them. The first place to start is the actual purchase of the new car.

It doesn’t matter what type of car you are looking for, hunting around forecourts to compare deals is a must. If you are looking to get extras put on your car, haggling is essential, this can save you hundreds of pounds as salesmen try to reach their targets.

Joanne Mallon, Sainsbury's car insurance manager said: "Between February and July, over 370,000 people said they planned to buy a new car, but would not haggle over the price. Given you can save over £1,500 on the price of a brand new car by haggling, these people could have collectively lost out on more than £550 million."

Check out some car price comparison websites such as Moneysupermarket.com’s new motoring channel that allows consumers to compare the cost of buying a car from retailers including jamjarcar.com and best4cars.co.uk.

After securing a good deal, you then have to look at how you are going to finance the purchase. Nick White, head of personal finance at www.uSwitch.com, said: "It's all too easy for your dream car to turn into your worst nightmare, if you don't think about how you will finance it before you indulge.

"Consumers may be more worried about which car will improve their street cred, but the money saved from selecting the right finance could enable them to get a better car or additional perks, like a sun roof or in car entertainment system."

Picking a finance package is as hard as choosing a new car. Clearly, the best option is interest free finance as it is cheap, but this is normally for new cars only. The downside of getting 0 per cent finance is that most require a large deposit and the loan is usually paid off over a short period.

According to the Alliance &Leicester, 5.5 million motorists (17 per cent) use car showroom finance, even though the interest rate is double figures.
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