Get the best price & avoid rip-offs.
Buying a used car can save you lots of cash compared to a brand new. Whether you’re after a cheap runaround or a dream machine you’ve lots of choice on the second-hand market.
But with murky histories and hard-nosed salesmen, it can be a minefield. This guide is filled with top tips to minimize the chance of any nasty surprises.
Top tips when buying a used car
How much a used car will cost you will ultimately depend on what car you get. Yet there are plenty of ways you can reduce the final bill.
1. Year old cars are MUCH cheaper than new cars
By the time a car is one year old with 10,000 miles on the clock, its price is bound to go down. In the second year, the depreciation rate is likely to slow by roughly half.
So picking a year-old model will dramatically slash the upfront cost. There are exceptions if you’re picking a plush model. Brands that hold their value best tend to include Mercedes and Porsche – so you won’t see too many year-old luxury car bargains out there.
2. The cheapest cars to run
To save you time and energy trying to work this out, car experts have already done this research. You can compare running costs of different models, including the ones you’re looking to buy, on several sites. But, follow these rules to home in on the cheapest cars:
- Smaller engines can be cheaper. A large engine will usually burn more fuel than a smaller one. So engine size is a vital consideration if fuel economy is an important factor in your decision. Of course, this depends on how you use the car. A small engine is most efficient when it’s used as intended, such as to pootle around town. If a small engine is used a high speed, it’ll need to work much harder to keep the car moving – burning more fuel.
- Gasoline cars tend to be cheaper than diesel. Diesel engines are often more economical than their gas counterparts. But don’t be fooled into thinking this definitely makes diesel a better option. These cars are more expensive, and they usually cost more at the pump than gas.
- Manual cars are cheaper than automatic. Switching between gears is extra work – particularly to those of us prone to stalling at traffic lights. Yet while automatics take some of the hassle out of driving, they come with a higher price tag. Yet many automatics are more fuel-efficient than their manual counterparts, as they ‘know’ the best gear to be in, so you could recoup the extra cost over time.
- Hybrid cars are cheap to run, but cost more to buy. Technology is improving everyday with modern hybrids coming in all shapes and sizes, from superminis to luxury SUVs. Fuel-economy and cheap or even zero tax rates make part-electric models appealing, like the Toyota Prius. They also tend to hold their value for resale. But they usually cost more to buy – so weigh up the savings.
- Check CO2 emissions, as it affects the duty you pay. Buyers of the most polluting cars pay the most road tax. But choose a car (such as the emission-free hybrid Toyota Prius) that produces less than 100g of CO2/mi and you’ll pay nothing at all.
- Smaller cars are cheaper to insure. If you’re looking to save money, you’ll want a car that’s cheap to cover. The cheapest to insure tend to have a lot in common, including size. Put simply, it’ll cost you more to insure a 4×4 than a small city runaround.
3. The best time to buy a used car
Once you’ve decided what car to pick, now you need to know how to get the best deal. One way to slash costs is to buy at the right time.
Dealers have targets to meet, with bonuses up for grabs. Typically, these are based on quarterly sales, making the end of March, June, September and December a good time to buy. They need to shift cars, so will be more willing to negotiate and offer attractive finance packages.
But, if you’re buying from a private seller, there’s unlikely to be a good or bad time. Private sellers don’t have targets to meet, other than the price they want to achieve. If you’re buying this way, keep an eye on prices a few months before you actually buy – if they’re heading down, you may want to wait. Heading up, and it’s prudent to buy sooner.
For a quiet time, try to avoid weekends, or the start of the month, just after payday. A dealership crammed with wannabe buyers isn’t a good place to bargain hard.
If you’re buying privately, it’s also worth picking your time when other potential buyers might be away. This could be over Christmas, or deep into the summer holidays. Think about the style of the car too. Summer is when drivers dream of buying convertibles, making winter a good time to haggle for a deal on one.
4. ‘What car do I need?’ checklist
Before you start browsing for the ‘one’, think about what you really NEED from a car. There’s no point buying a two-seater convertible if you’re about to start a family, so work out what’s realistic. Ask yourself:
- What are my essential requirements? Enough room for the family? A cheap car to run? A sporty number? Think about what you need…
- Do I need the car to do anything specific? This could include towing a trailer or fitting into a small space. Is it for short city drives or longer motorway journeys? Does it need to be able to cruise at motorway speeds without straining?
- What’s better, gasoline or diesel? The fuel you want to use can make a big difference in the model you might choose.
- Do I need a massive boot? Consider whether you need room for things such as sports
- Equipment or a pushchair – or if you need to fit friendly Fido or your meddling mother-in-law?
- Do I want to consider an eco-friendly car? If so, a hybrid or electric car could be an option.
5 . Need to get rid of your current car? Selling privately can net you 20% more than part-exchanging
If you need to get rid of your current wheels, you’ve two options. You can either part-exchange the car at the dealership, where the dealer gives you a price and knocks it off the total cost of the car you’re buying. Or you can sell privately – where you list the car and get cash from the person who buys it.
- Part-exchange.This can save a lot of hassle, but it’s highly unlikely to be money saving. Yes, it stops you having to advertize the car or deal with potential buyers, but, and this is a big but, you also won’t get as much as selling privately. Remember, the dealer will pay less than your car’s value so it can move it along at a profit. So weigh up offers carefully.
- Selling privately. This is more time consuming, but you’re likely to get more for the car, if you’re prepared to put the effort in. Options include classified listings as well as selling the car on eBay or Facebook.
6. ‘How much will it cost me?’
Before you start doing your sum you need to decide what car you want.
You can check out every model online as well as read tons of online reviews.
There are two sorts of costs you need to budget for: upfront and ongoing. Check you’ve thought about all of the following and budgeted for them:
- Any upfront costs. Once you’ve decided to buy a car, you will of course have to pay for it. You can either pay the whole cost upfront or take out a finance deal. Whichever way you choose, expect to at least pay some kind of down payment before you drive off.
- Finance repayments. If you’ve taken a personal loan or dealer finance, you’ll need to factor in repayments – read more on your finance options.
- Fuel. To work out the rough cost of running a new car, you can check out various helpful websites online.
- Tax. You can check out how much road tax you’ll need to pay on the DMV.org website.
- Car insurance. The cost of insurance is based on how much of a risk insurers perceive you to be. Eg, if you are a youngster who’s just passed your test, you will pay more for your cover. Plus, taking breakdown cover will bump up the cost. New cars often come with a year’s worth of breakdown cover.
- Servicing. You’ll need to get your car serviced regularly, typically once a year, though it varies by model. Servicing ensures it’s safe to drive and keeps the manufacturer’s warranty valid.
- Parking permits and tolls. Unless you have free parking where you live, or a garage, you will probably have to pay for a resident’s permit. Check your council website to see how much this costs. Consider any costs to park at work if you drive there too, as well as toll charges you may face along the way.
- Other spending. New tires, repairs and valet cleans can add up, so make sure there’s some breathing room in your budget. So allow a couple of $100s extra for additional spending per year – just in case.
7. Check as many dealerships as possible and pit them against each other
Ask all the dealers in your area for their best deal on your second-hand car of choice. If you’re prepared to travel far and wide to find a rock-bottom price, expand your radius. Make a note of the best price, and ask others to beat it.
You can always go back to your local dealer to ask if they’ll match the best offer. They might be keen for your cash, and happy to offer the same deal.
8. Always haggle!
Haggling isn’t reserved just for backstreet bazaars, it’s a dealer’s classic skill – and it’s expected of you, too – so bargain hard. The first rule is that you should NEVER pay the list price of the car – you’d be a fool to hand over the full cost (unless buying online, where your haggle opportunities are limited!).
Arm yourself with the cheapest web prices and make dealers compete for you.
Haggling can be daunting, even for hardened money savers, yet there’s nothing to be scared of. Here are some of the top tactics.
- The beginner’s haggle – get them to chuck something in for free. Dealers often say they’re not allowed to give discounts but if you’re new to haggling, an easy start point is asking them to throw something in on top. Whether it’s free sat-nav or floor mats, if you need an add-on, try not to pay extra for it.
- Look for already-discounted cars. If the price is already reduced, there’s often more flexibility. The boundaries have already been flexed and the psychological loss for the salesperson is reduced as they’ve already given up on the idea of getting full price.
- Don’t fill the silence. As negotiations come to a close, a classic sales technique is staying silent. They want you to accept the price just to fill the awkward silence. Make them fill it with a cheaper offer.
- Walk away – get them to call you back. Psychologically, if they have to chase you, rather than you being super keen, is more likely to lead to a better deal.
- Flaws mean discounts. Look for the tiniest of dents or scratches. This makes them more difficult to flog, but still perfectly nice to drive.
- Play them off against each other. This is covered in the point above but worth mentioning again. To really up the haggling, don’t target dealers in isolation. Try to play off a number against each other. This has two advantages: it gives you a solid foundation and it prods their competitive instincts in your favor, as they want to prove they’re better than the opposition.
- Be friendly, but firm. You’re more likely to get a result if the staff member empathizes with you. If you’re polite, charming and treat the whole process with humor, you’ll get further.
- Watch for the “whack-a-mole” effect. Haggle on the price of the car, and the dealer might then charge more for the finance. Haggle on the finance, and there might be no wiggle room on the price of the car. It’s worth doing your sums to see how much each saving from haggling will be – and taking the most valuable.
- Ask for the sun and you may just get the moon. Remember, do it with humor, do it with style and there’s no price or suggestion too outrageous. You can haggle virtually anywhere for anything.
9. Buying a used car checklist: What to look for?
It’s not just about rocking up and liking the look of the car – instead you need to look at everything, from the paintwork to the tires, seatbelts and headlights. Make sure you follow our nine things to check:
- Check the car’s mileage. The average covered is around 10,000 miles a year, so if the odometer’s figure appears wildly out for its age, ask why. If the answer doesn’t stack up, be suspicious. Crooks may have ‘clocked’ the odometer. You can also check the last service for the mileage to see if this is in line with the figure.
- Overall condition. Cast a beady eye over the car’s condition, crouching down to look for scratches and dents.
- Check repairs. See if there are any signs of poor repairs, such as gaps between body panels after crash damage.
- Check the oil. Do this by lifting out the dipstick to see if the level’s correct.
- The engine. Look at the engine for signs of oil or water leaks, as well as the surrounding parts – and look under the car for any signs of leaks too.
- Test the radio. Plus all other gadgets to make sure they work.
- Turn on the lights! Check these work, and that you can open and close the windows easily.
- Is it safe? Vitally, does the car seem in safe condition to drive. Trust your gut – if the seats are sagging and the car looks like it’s ready for the scrap heap, continue your search elsewhere.
- What about the tires? Check for tread and inflation.
10. Diesel cars are more fuel efficient – but won’t be worth it for most…
Diesel engines are often more fuel-efficient than their gasoline counterparts. But don’t be fooled into thinking this definitely makes diesel a better option.
It’s possible to pay almost whatever you want for a used car, though you tend to find that diesel cars – even used – are slightly more expensive than gas. But, where people think diesel is much better value is on the gas station forecourt. And this tends to be true – even in today’s environment.
Both offer their own advantages – and remember that fuel prices fluctuate, so check these at the time of buying.