Monday, March 16, 2009
Category:
Personal Finance Tips
As car dealers reduce prices in a bid to entice custom, it would appear that this could be a good time to buy a new or second-hand vehicle.
According to esure car insurance, an estimated 4 million Brits are in the process of considering purchasing a car, and it would seem that many are of the opinion that the launch of the ‘09’ registration plate poses a good opportunity where new, used or pre-registered cars are concerned.
esure car insurance has offered the following advice to prospective buyers who are looking to attain the best deal in the market:
- Always attempt to negotiate the price down. It is a buyers’ market thanks to the recent fall in demand and over-supply of vehicles, yet only 68 percent of the motorists surveyed said that they would barter. January saw a 31 percent reduction in new car sales, so start with a low offer and be prepared to walk away as there is a good chance that you will be followed.
- Shop around for finance. Worryingly, 68 percent of the motorists questioned said that they do not do this prior to embarking upon a car purchase. Investigating the most suitable options available and comparing APRs could result in substantial savings.
- Do not assume that an advertised ‘0 percent finance offer’ will be available to you. This is decided on a case by case basis according to acceptance criteria, which includes a person’s credit history and level of debt.
- Before purchasing a car, get an insurance quote. In many cases, people are drawn into a sale by deals on higher-performance cars but later discover that the insurance premium is too expensive. 24 percent of the motorists questioned said that they would not get an insurance quote prior to purchasing a vehicle.
- When deciding what car to opt for, consider the financial stability of manufacturers. The collapse of such a company could negatively impact on the cars re-sale value. In addition, a minor accident causing only minimal damage could result in the vehicle being written off due to the unavailability of parts.
- Rather than part-exchanging your vehicle, sell it privately so as to make the best possible return. 40 percent of the motorists surveyed said that they would prefer to avoid the hassle of attracting a private buyer; however a better price could be attained in doing so.
- For significant savings on new cars, consider purchasing a pre-registered vehicle as opposed to a brand new one. A pre-registered vehicle is one that has been registered in the supplier’s name prior to your own, but is actually new to all intents and purposes.
- Do not limit yourself to shopping at a main dealer. There are an array of alternative options out there such as car auctions, private vendors, online sites, magazines such as Autotrader, classified advertisements, and even car swapping with friends, family or colleagues.
- Be aware of new Government initiatives. A ‘scrapping incentive scheme’ is currently being investigated by Ministers, whereby motorists could be offered up to £2,000 to scrap cars over nine years old.
Head of Risk and Underwriting at esure car insurance, Mike Pickard, commented: "With a recent fall in demand for new cars crippling the car manufacturing industry and a slide in the value of the used car market, now could be one of the best times to buy a car. Discounted prices, cashback offers, 0 per cent finance deals, the reduction in VAT and even buy one get one free offers at some dealerships are there to entice motorists to part with their cash.
"With many drivers considering a change in car, whether it's bargaining on the forecourt or shopping around for the right finance and insurance deal, spending an hour or two researching the options available could make a real difference to your wallet - particularly in such a strong buyers' market."
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Those that are looking to take advantage of the buyers’ market, and who are looking for finance options, could consider taking out a
secured loan. A secured loan could be used to purely fund the new car purchase, and existing debts could be consolidated at the same time. Available to homeowners with a mortgage, this finance option can be taken out over a term to suit the borrower from 5 to 25 years. However, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
