Been in a car showroom lately? Noticed those fixed grins on the faces of the sales staff? In spite of appearances, all is not rosy in the world of car sales.
Traffic in the showroom — like everywhere else — is slow. Targets are being missed. The pressure is on. Dealers are keen to get someone, anyone, to buy a car.
So how can you take advantage of the car dealer’s mire and bag yourself a bargain? Here are GP’s seven steps to getting a great deal on an 07-plate car.
1. Do your homework
Sales staff prey on the unprepared. Before you even set foot in a car showroom, spend as much time as you can deciding on which car suits your needs and budget.
Decide where your priorities lie — do you want a car big enough for all the family or a sporty little number? How important are green issues and safety for you?
Use magazines such as What Car? and the internet to draw up a shortlist of cars that interest you most.
2. Set a budget
Remember that it is a salesperson’s job to get you to part with as much cash as possible and they can often bamboozle you with fancy ways of reducing monthly payments and making your chosen car more affordable.
Once you have determined what you want to spend — overall or as a monthly outlay — stick to it.
3. Make the most of part-exchange
Can you be bothered to sell your old car privately or do you want to take the no-hassle part-exchange route? Look up the car’s value and be realistic about its condition.
Remember that the most important figure to talk about is the ‘cost to change’: the difference between the value of the part-exchange vehicle and your new car.
Be aware that dealers can seem generous by offering you more for your old car, but that excess allowance only reduces the discount on your new car.
4. Take a test drive
The number of people who actually buy a car without testing it first is amazing. You wouldn’t do that with new clothes or shoes.
Be demanding: test drive the car you want, not the one the salesperson wants you to drive. And take it out for a good long drive on roads you know — a quick spin around the block will tell you nothing.
5. Check out the finance options
Most people choose to finance their purchase rather than buying outright, either through a traditional loan or HP agreement, or one of the increasingly popular personal lease schemes, often called PCPs. They help to keep monthly payments low by deferring an amount of the loan to the end of the period. You make an initial deposit and monthly payments. Then, at the end of the term you hand back the car, pay the deferred amount to own it or take out another PCP using any equity left in your current car as a deposit on your next one.
Car manufacturers normally support low-rate finance deals but this should not stop you getting a decent discount on the list price of the car from the dealer.
The key figures in all finance deals are the annual percentage rate (APR) — generally speaking, the lower the better — and the total amount payable over the loan term.
Shop around for finance. Only take out payment protection insurance if you are sure you need it (and you have checked elsewhere to see what is on offer) and always check the small print before signing.
6. Haggle over the price
Haggling may not come naturally to you, but these days you do not need a poker face to make big savings. Check out the What Car? target price to work out the minimum level of discount you should expect.
Do check prices from internet brokers too. The best of them simply act as an introduction agency by putting you in touch with their chosen dealer whom you then deal with and pay directly.
You may not want to buy through a broker but there are few more useful tools than a piece of paper from a broker you can plonk in front of a car dealer with a massively discounted price. Your dealer might not be able to match a broker price, but they may get close enough to make it worthwhile striking the deal locally.
7. Don’t sign unless you are totally happy
If at any stage of the deal you feel unsure or uncomfortable, do not sign on the dotted line — walk away. There are plenty of cars and dealers out there so you can afford to be ultra-fussy. Remember that if you sign an order form it is a legally binding contract and pulling out might be costly.
The hard work does not stop with the sales contract however. When delivery day arrives, you need to check your car with a fine-tooth comb before accepting delivery. Make sure the car meets your exact specification, that everything works perfectly and that it is blemish free. The moment you drive it off the forecourt, your rights start to diminish.
Do not wait to report a problem. If you feel the need to reject the car, be firm and polite, and do it quickly.
And, oh, there is a number eight to remember: enjoy your new car. Buying a car can be hard work, but it can also be tremendously rewarding. Follow our advice and you can be proud of your purchase and class yourself as an expert car buyer. We guarantee there will be a queue of friends and family asking your advice.
Steve Fowler is editor of What Car? magazine, www.whatcar.co.uk