Looking For A New Car? How to Avoid Financial Headaches

Explore buying options

In the past, if you wanted to buy a car, you had to pay the total in one go. Now, there are multiple alternatives. You can still pay for a new or used car up-front, but it’s increasingly common to buy on finance. This means taking out an agreement with a lender and paying instalments. 

Taking out a loan of any kind is a big decision, so it’s important to take your time to compare options, read the terms and conditions and make sure you understand what’s involved. There’s been a lot of talk about vehicle finance recently, due to agreements being mis-sold in the past. If this has affected you, you may be eligible for compensation via a car finance claim. It’s essential to remember that these claims are linked to historic agreements. If you buy on finance now, you don’t need to worry, but it is crucial to read the small print. Always make sure you can afford the repayments. It’s helpful to calculate the total monthly cost, including your instalment fee, fuel expenses, insurance and maintenance. 

If you don’t want to borrow money or sign up for monthly payments, you can pay the total fee. It’s possible to reduce costs by part-exchanging or exploring cheaper vehicles. Used cars are often less expensive than brand-new models and they depreciate more slowly.

Set a budget

Before you look for a new car, it’s beneficial to set a budget. The cost of buying a car and keeping a vehicle on the road varies hugely. Having a clear maximum limit in mind can help you narrow down your options and avoid disappointment. Research average costs, compare quotes and prices, take your time to explore offers and search for deals and add extras, such as car insurance and fuel. Once you know how much you can spend, you can use filters on websites and discuss suitable options with reputable dealers.

If you don’t have a set budget, there’s a risk of overspending or having unrealistic expectations. Analyse your finances, figure out how much you want to spend and start your search with a preferred price range. 

Search for deals

Competition in the auto industry is fierce, which can bring good news for customers. Before you buy a car, compare deals and look for offers, such as manufacturer deposit contributions. You may also be able to save by snapping up vehicles ahead of a model upgrade or new vehicle release. If manufacturers or dealerships are desperate to shift stock, you could grab a bargain. 

If you’re buying a used car, there may be room for manoeuvre on the asking price. It’s always worth negotiating to see if you can get the total down. 

Compare insurance costs​

The average cost of car insurance in the UK is around £530, but prices vary considerably, depending on the age of the driver, their claims record, the value of the car and their location. Before you sign an agreement or buy a new vehicle outright, it’s beneficial to research insurance premiums and compare costs. 

Using comparison websites is a quick and easy way to get quotes and see whether your insurance expenses will rise once you swap your car. If you have a shortlist, you can also compare costs for different makes and models. Using filters is an excellent way to get accurate quotes from different providers. Once you’ve decided which car to buy and chosen an insurance policy, look out for the renewal letter or email. It’s always worth comparing prices before renewing automatically. You could save a fortune by switching to a different company if they’re offering new customer incentives. If you’re happy with your current provider, but the prices are no longer competitive, contact them and ask if they’ll improve the offer or match competitor quotes.  

Consider new and used cars

There are pros and cons of buying both new and used cars. When it comes to your finances, one option may suit you better than the other. It’s a good idea to go into your search with an open mind. Take your time to visit dealerships, look at websites and see what’s available. Weigh up the advantages and disadvantages of both options and consider what works best for you. 

Used cars are generally less expensive than brand-new vehicles, which may give you a wider and more diverse range of options, but it’s more likely you’ll need to pay for repairs and the resale value will probably be lower. New cars perform brilliantly and they look great, but they usually cost more and they depreciate faster. 

We often conjure up images of old cars when we talk about second-hand motors, but used covers all cars that are not hot off the transporter. If you love the idea of having a new car, but you’re eager to save, why not look for a car that’s one or two years old? You can buy used cars from dealerships or via private ads on car websites, auction sites or social media. If you’re buying privately, tread carefully. Ask to see the vehicle documents and service record, check the mileage and carry out a thorough inspection.

Buying a car is an exciting proposition for many people, but it can also be stressful, especially if you’re worried about money. Costs have risen in recent years alongside other price hikes. Consequently, many drivers are looking for ways to save. If you’re swapping your car, it’s beneficial to explore different buying options, set a budget at the beginning of your search, look for deals and offers, compare insurance premiums and consider both new and used cars. These steps can help you find the perfect car at an affordable price.