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Buying a Car: How to Get the Best Price

Save money on your car by being savvy

We asked Mike Humphrey, formally of search engine Fish4Cars and generally motor savvy, for his top tips for buying a car:

My first tip is take your time. After your house, buying a car is probably one of the biggest money spending decisions you make. If you think that on average it takes three months to buy a house, you should take at least half of this to choose a car.

During this period do your research. Before you even go to look at the actual cars, you should know what size, make and power of car you need. This way you can get a rough idea of how much you should be paying from research on the internet. It also will stop you impulse buying once you actually see the cars in the flesh. Decide what car based on:

What you are going to use it for? Motorway driving or around town?
What is your budget?
What fuel do you want?
How safe do you need it to be?

Research will help you when it comes to buying the car as it will show the vendor that you mean business. This way they can help you buy the car, rather than persuade you to buy something you don't want. When you go to a dealer take all your notes and research with you to help you negotiate and get a good price.

Smaller dealers should be cheaper and give you better service. They have fewer overheads and fewer hard-hitting salesmen. This will give you more space for negotiation. I recommend going in at 20% lower than the asking price. Even if they laugh at you, you should still get a better deal by starting low.

If you are looking to get a knock-down deal at a car auction make sure that you get someone who knows their mechanics to go with you. It's tough to get a good deal as you are up against vendors who are buying for trade. However, because they are buying trade and you are buying retail, you can afford to go a bit higher on your bidding. So set yourself a sensible limit and see if you are willing to pay more because you don't have to make a profit.

If you are going to buy from a car supermarket you have to be savvy. They will often try to swindle you if you are doing a part-exchange. Make sure you know how much your current car is worth before you go. That way you will get the right amount for it. Negotiating at car supermarkets is difficult as they employ professional salesmen. Be firm about how much you are willing to pay and if you don't get the price, don't get the car.

If you want to buy on eBay then you'll have to take your chances. In my opinion, anyone who buys from eBay is at risk. If you can see the car first and then buy it online then fine. But impulse purchases without seeing the car are dangerous.

Quick tips:

You must get minimum of 6 months MOT
Always ask for a full tank of petrol - especially considering petrol prices at the moment
Mud flaps and mats should be provided
Do a VIN test on a car on the spot - you just have to call their hotline and they will be able to tell you if the car is legal or stolen
Always ask all the what ifs
Take your time

Do your research
Shop around
Haggle down the price

If you buy a car new you lose up to 20% of its value as soon as you drive away from the dealership. Basically this means that if you are looking for a good deal on a car, a new car is not the answer. There are tons of other ways to buy a decent car that is in good working condition. It might not have that crisp, new smell, but you could save thousands. Check out our guide to the best places to get a great deal on a car and what you should do to get the cheapest price.

Step one: Do your research

Research is the key to getting the best price on a car. Don't swan into a car supermarket and ask what you can get for your money. You should know:

What different makes and models of car you would like to buy
What mileage is acceptable
What kind of condition you want the car to be in
How much this car is worth

Knowledge is power. If you know roughly how much the type of car you are looking for is worth, you won't end up getting ripped off.

Which car?

When choosing the car you are going to buy, get clued up about which makes are better than others. Everyone knows that Volkswagens are really sturdy and safe cars. But you pay the price for knowing you're secure. Skodas may be sniffed at, but they are made from similar parts and components as VWs and they have the exact same chassis. They just have a smaller price tag. If you need to save money on your car, don't buy the brand. Do your research to get the best car you can get for your budget.

You should also take into account how much repairs might cost you in the future. French cars are great value for money, however the spare parts are notoriously expensive. On the other hand, a Ford will probably cost you a bit more, but parts in the future are cheaper.

Mechanics

You also need to be up to speed on basic mechanics to check you're not buying a pile of junk. Even cars that look great can be on the verge of mechanical collapse. If you don't have a clue, take someone who does with you.

Budget

When putting your budget together, take into account insurance and road tax. Don't blow your budget on the car and then not have enough money to insure it or pay for the road tax. Be realistic about what you want the car for. If you are going to be doing a lot of motorway driving then you will need a car with more power that will consume less. However, if you just want a small car for running about town, there's no point in looking at super cars - no matter how pretty they are.

Step two: Shop around

Second-hand dealerships

A good first point of call is your local second-hand dealership. You can find your nearest one by looking on Buy Your Car. It has a list of all second-hand car vendors in the UK. Prices at local businesses here tend to be slightly cheaper than car supermarkets as they have fewer overheads. A smaller business means a more personal service. Fewer hard hitting sales men means more opportunity to haggle.

Car supermarkets

Car supermarkets, or car hypermarkets are a relatively new phenomenon, even though they've been around for the last 30 years. They deal with new, nearly new and used cars. The stock is often ex-rental, ex-demonstrator, ex-company and ex-fleet cars. This can mean the car is fairly new but has lots of mileage as the previous owner has used it driving around for work. However, it can mean that the car has just sat in the showroom until it's ready to be sold on.

The main difference between car supermarkets and smaller deals are:

Bigger turnover - you have to do your research and then turn up ready to buy on the day. Otherwise your bargain might be sold before you have time to sort out the finances.
Less chance to haggle - prices are often fixed at the lowest they will sell the car for
Mainstream manufacturers will make up the largest proportion of cars

If you are part-exchanging your own car, get an independent valuation before you go. This will give you an accurate idea of how much your car is worth. Then if their valuation is a lot below this, you can choose to sell your car yourself to get it's full value.

Make sure the organisation is registered with the Retail Motor Industry Federation (RMIF).

Car auctions

Car auctions can be a way to get a bargain. You have to be on your game as you will be up against lots of dealers who know their stuff. You should always go with someone who knows their mechanics to check the car is in good working condition. You will not be able to test drive the car. This means you must test drive the same model elsewhere to check you like it. Do this before you go to auction.

Here are our auction top tips:

Go to the auction first as a spectator to get the feel of how auctions work.
Read the terms and conditions of sale carefully - watch out for hidden extras and always factor in any delivery costs.
Don't get carried away bidding: stick to your budget and factor in any seller's premium or other fees charged on top of the 'hammer price', like road tax etc.
Test the car as soon as you can after you've paid - if there's anything wrong you'll only have a very short time in which to complain.

You can take part in live auctions online if you can't get to the sale. However, if you are an auction amateur this isn't the best idea. Unless you know your cars, we strongly recommend you go there in person. For online sales, cars are given a grade to rate their condition. You can also view the car on the webcam to have a look at it. Auction houses should be up front about the condition of the car and demonstrate clearly if the car is damaged and how.

There are lots of auction houses across the country. Here are some of them:

Ex-police cars and stolen property auctions

You can get some great bargains online, as long as you can trust the vendor. The government and the Police auction lots of vehicles online. These vehicles are often unclaimed stolen property and can be in quite bad condition. However, some are absolute steals.

Bumblebeeauctions is the UK Police Property Disposal website. The site sells off cars from around the country that have been seized by the police. They are very upfront about the condition of the car. However, because these vehicles have often been stolen and an owner hasn't been found, you may not get an owner history.

With this site you also need to be able to pick up the car. So buying from a police station that isn't close to where you live, doesn't work.

There are loads of sites around the country that sell ex-police vehicles. These are often high powered vehicles with a complete vehicle history, sold at less than half their value. They have quite high mileage, but you know that they have always been driven by professionals and never abused.

Before the vehicles are put up for sale, all the police equipment is removed. The interior is refurbished and the outside is re-sprayed. Be prepared - most of the vehicles are white! They usually come with a 12-month MOT. If the one you want doesn't, find a company that does offer it and use their offer to haggle for your MOT.

Have a look at these sites for more info:

Buying from an individual

Buying from an individual is often the best way to grab a bargain. However, it is also fairly risky as you are putting your trust in an individual who might not be what they seem. You can protect yourself. Our tips to avoid being swindled are especially important when buying from an individual.

However, as long as you stick to the tips, buying from an individual is cheap because:

They don't have any overheads
There won't be hidden extras
You can haggle with the person and they probably won't have sales experience, which gives you the advantage

There are loads of places to look for individual sellers. Try your local newsagent or library and any local papers. You can also have a look on these sites:

Remember:

Always look at the MOT certificate.
Check the mileage is genuine - look for market screws in the dashboard or any signs the dials have been tampered with.
Check how many previous owners the car has - the fewer the better.
Do not buy a car that a 21-year-old male is selling after having it for a couple of years. Chances are they have bashed it around and really driven it full out a lot. Buying from older vendors is much safer.

Buying online

Buying a car online is tricky. To buy a second-hand car you really need to go and have a look at it and check it is in good working condition. It doesn't matter how it looks on the outside, it could be a wreck on the inside.

It is for this reason that we at moneymagpie think that buying online is not the best idea, especially if you are a first time buyer.

However, online resources are really useful for getting an idea of price for when you do buy your car. So it's worth taking a look at sites like eBay Motors. Just don't get carried away and buy something on an impulse.

Step three: Haggle down the price

Most second-hand car prices can be haggled down. Considering current economic conditions, you have the upper hand as fewer people are splashing out on big expenses like cars. The salesmen are as desperate to meet their targets as you are to get a good deal. Use this to your advantage and push them as far as they will go on price.

As we said, in car supermarkets the prices are set as low as possible to make more sales. This means you probably won't be able to push down the price. But you should still try.

The key to good haggling is to be well informed. Know what deals are available and play vendors off against each other. You also need to know your budget. Set yourself an upper limit so you're clear on how much you will pay. Then start by offering 20% under the asking price and hopefully you'll be able to push the price down. Always be nice when haggling and if you can't get money off, try and get extras added in. If you can get a year's MOT or road tax, you are already saving a lot.

Don't get pressured into buying insurance and extras as part of the package. Shopping around for insurance is almost definitely the better option. However if you do your research before you go you'll have an idea of the price you should be paying for insurance. Then if the dealer's price is fair, you can go for it. If it's not, leave it.

Tips for a safe purchase

Don't get swindled by following these tips:

Never buy a vehicle without a registration document or certificate (referred to as 'registration certificate') even if the seller says it has been sent to the Driver and Vehicle Licensing Agency (DVLA) for changes. Check the certificate is genuine by holding it up to the light and checking the watermark.
Before you go to view the car, find out where the 17-digit Vehicle Identification Number is on that specific model. Then when you view the car you can take the VIN number and check it matches the number on the certificate you are presented with. Be suspicious if it looks like the VIN on the car has been tampered with or is not there.
Avoid ads that only give mobile phone numbers - they are virtually impossible to trace if something goes wrong.
If adverts give specific times to call on a landline this could indicate a telephone box. Give the call a number outside the times given to check if you are suspicious.
Always view the car in daylight at the sellers home. Don't view it at night or when it's raining otherwise you may miss important details on the body work etc.
Make sure the owner is familiar with the car. If they are not, this may indicate that the car is stolen.
Watch out for cars with a 'Q' registration number. These are assigned when the age of a car cannot be ascertained. Unless the owner can prove exactly how old the car is, a 'Q' number plate can mean that the car is the combination of several different cars patched together.
Are all the locks on the car the same? Thieves often replace locks they have damaged.
Check the engine number matches the registration certificate. It is also important to check that the engine hasn't been interfered with.
Never pay cash ever.
If in doubt, walk away.

For more tips visit The AA website. If you need to find out about checking vehicle information have a look at this page on the Direct Gov website.

Remember that if you buy a car that turns out to be stolen, you could have no right to it's ownership. Always be sure before you buy.