Tricks of the trade: Insider tips for buying a new car

• 19 Feb, 2013
• | by Chris Pollitt

With the latest registration mere weeks away, there’s a good chance plenty of you are looking forward to hitting the dealerships in the hope of filling your driveway or garage with a nice, shiny ‘13’ plate car.

With that in mind, we’ve compiled five insider tips to give you the confidence you need to not only walk into that showroom with your head held high, but to also help you save money.

1) Read the margins

Everyone knows that everything for sale has a profit margin within the retail price, and what you’ll be expecting next is for us to tell you that every new car carries huge margins meaning potential savings of thousands.

Well, sadly, we’re not, as new cars simply don’t have the margins you might think. So, be realistic when negotiating the price. If you demand £2,000 off, the salesman will have to say no – not because he’s playing hardball, but because he simply can’t do it.

Then there’ll be frustration, embarrassment and neither the dealership nor you will benefit.

Ask for £500 off, though, and you should be onto a winner – the dealer isn’t going to lose your business over that.

2) Factory fresh?

On delivery day, would you be able to spot the difference between a car that was built three months ago and a car that received its final nuts and bolts three weeks ago? No, we couldn’t either.

Yet people still deem ordering a ‘factory build’ as the best thing ever. If the dealer tells you he’s found a car in group stock that’s built, he’s trying to help you get your car faster.

Unless you absolutely have to have it painted in that shade of green the manufacturer put in the brochure for a bet, or if you simply must have the £600 optional sat-nav that’s made to look like an antique next to any modern £149 offering, consider giving it a miss.

Physical stock is your friend. It’s built, it’s waiting for you and it’s an asset to the manufacturer, and an asset they need to sell. Factories build cars no matter what – there’s no reason to offer you a discount when it’s still a steel sheet.

3) A question of time

If we could show you a monthly or quarterly projection for a dealer’s business, you’d probably make some sort of spluttery, panicked noise. Basically, they have to make a hell of a lot of money and brilliantly, they normally don’t worry about it until the last minute.

Walk into a dealership on the last weekend (or better yet, the last day) of the month and salesmen will fall over backwards to do you a deal. Walk in at the end of a quarter, though, and you’ll be treated like royalty. You will almost certainly be offered all manner of discounts, but please don’t snort in derision when the salesman tells you they only apply if the car is registered that month. He’s not lying.

That car you’ve fallen in love with becomes ‘just’ stock as soon as the calendar hits the 1st, and the salesman won’t be in the mood to do an amazing deal, as he’ll be getting a telling off from his sales manager because the dealership missed their target.

4) Mind the GAP. and the paint protection

It’s no secret the dealer is going to try and sell you extras with your shiny new car, the main two being GAP (Guaranteed Asset Protection) and some kind of paint protection.

The dealer is going to want you to take these things. You’ll be told how amazing they are and you’ll be told you simply must have them.

Well, GAP can be quite a good thing to have, but maybe not from the dealer, because it’ll be about £400 – far more expensive than it should be.

For those of you who don’t know, GAP is normally a three year policy which, at its core, will return you to the amount you paid for the car in the event of a total loss by making up the ‘GAP’ between the invoice price and whatever the current market value is at the time the car is written off. But you don’t need to pay £400 for it.

A quick internet search will turn up no shortage of reputable companies who can offer you GAP from £150 for three years of cover.

Speaking of searching on the internet, you can run a quick car insurance quote on the hop with your mobile device – if you have one that is – while you’re at the dealership, so you can know how much you should by paying for your annual cover. Handy, that.

As for paint protection, well, it’s normally around £300. But here’s a secret: washing and waxing your car keeps it clean, not a £300 bag of ‘miracle’ polish that cost the dealership £50.

5) The part exchange

It’s the simplest thing to overlook in the buying process because it is, after all, the car you’re getting rid of. But while it may be of no further interest to you, it can still hugely useful.

The dealer will offer you what feels like £4.99 for the car you’ve cherished for the last five years, so why not sell it yourself? You may be in a prime position, too, as all you need to do is get more than what the dealer offers.

Try getting the dealer to appraise your car and put a value on it – there’s no obligation to include your car within the deal – then, when you’ve scoffed at their offer, simply advertise it for around 15-20% more than the dealer’s figure and wait.

Your increase on the dealer’s offer may still undercut most other private sales and you’ll also have more money to put towards that shiny new car.

With these tips, you may be able to save a huge amount of money, but there is just one thing to remember, and that’s the fact that you’re in control all the way.

The dealer wants your business and they’ll do anything to get it, but that’s a good thing

Ignore the clichés and stereotypes – the dealer wants you to not only buy, but to buy when you next want a new car and to also recommend their services.

It’s a buyer’s paradise out there, and with these tips at hand, you’re all set to grab a bargain!

Where to buy a new car

When buying a new car, you can choose between using a car dealership or a car broker. Both have different advantages and drawbacks, so here are the facts you need to know before deciding.

Buying a new car from a dealer

Dealers are many people’s first choice when buying a new car, even though they don’t normally offer the kind of bargains possible through a car broker.

Here are the reasons for their popularity, along with a few drawbacks you need to consider.

Pros of buying from a dealer

Did you know?

A pre-registered or ‘nearly new’ car is a brand new car is heavily discounted because it has already had one owner – the dealer.

Dealers register new cars to themselves to get bonuses from manufacturers for hitting monthly sales targets, then sell the cars at reduced prices to shift stock.

• Your consumer rights are stronger when you buy from a dealer.
• Face-to-face customer service.
• You can part-exchange your current car.
• You can test drive and check the car.
• Dealers can offer the widest choice of cars, and your exact specification.
• If you have any problems with your new car, your dealer is likely to be local and so available to talk to in person.

Cons of buying from a dealer

• You’ll have to negotiate to get the best deal.
• You might not get the best part-exchange deal – you’ll get more selling your car privately.
• If you buy a pre-registered car, you are unlikely to get “new car replacement” cover from your car insurer in case your car is written off in the first year you own it.

Buying a new car from a broker

Top tip

If you buy a pre-registered car, make sure this hasn’t affected the manufacturer’s warranty in any way.

Car brokers claim they can offer savings of up to £5,000 off a car’s list price.

This is because of the discounts manufacturers give them for selling a target volume of cars and because there’s no salesman’s commission involved.

Most are online, though some have premises as well. Brokers tend to offer cars they’ve pre-registered after delivery by the manufacturer, or to source new cars from dealers.

Pros of buying from a broker

• Savings of thousands of pounds are available.
• Most will have the model and options you require.
• Your new car will be delivered to your door.
• No haggling because you’re unlikely to be able to negotiate and will usually have to pay the advertised price.

Cons of buying from a broker

• Most brokers operate online, so you can’t just pop round to talk to them if you have problems with your new car.
• You probably won’t be able to part-exchange when selling your old car opens in new window .
• Some brokers might not be able to offer as wide a choice of cars as a dealership, or the full list of optional extras.
• If you buy a pre-registered car you’re in effect its second owner, which can affect the car’s value when you come to sell it.
• Brokers can’t offer the face-to-face service a dealer provides.
• You can’t test drive the car, so would need to go to a main dealer to do this.

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