Let’s face it; if you don’t have much disposable income each month, buying a brand new car isn’t going to be an option. But for those that do, it is worth bearing in mind that this can often be more expensive in comparison to buying secondhand cars.
If you have your heart set on buying a brand new car, it’s worth doing a bit of research on the subject before you go out and sign on the dotted line, as it were, because it is quite easy to get stung by exorbitant finance charges and monthly instalments, potentially leaving you penniless in the worse-case scenarios!
This handy guide will show you how to go about buying a brand new car the smart way, leaving you with the tastiest deal in town, as opposed to having a sour taste in your mouth!
How much can you pay upfront?
It’s no secret that how good (or bad) a new car deal is will ultimately come down to dollars and cents. Some car finance offers, such as those by Jardine Motors, promise a 0% interest rate on hire purchase agreements or leases in exchange for a hefty deposit of say 40% or more.
My advice to anyone thinking of buying a brand new car is to come up with as much cash as possible. Not only will this open up more doors to you in terms of flexible finance arrangements, but it means that your monthly finance payments will be considerably cheaper than if you paid less money upfront.
Have you got an existing car?
If you have a car at the moment and it’s worth a few grand, I strongly recommend that you sell your car privately. I know it’s easier to trade your car in because you don’t have to deal with the hassle of putting up your car for sale and speaking to potential buyers, but you are far more likely to get a bigger amount of money than you would had you just part-exchange your car for your new one.
The only time I would say that it’s a good idea to trade in your existing car is if it isn’t worth much money; this is because it simply isn’t worth the effort or your time to get rid of the car by selling it privately.
Time your purchase well
Car dealers will usually reduce the price on new cars they are selling at certain times of the year, such as when it’s coming up to a public (bank) holiday, at the end of the month or even at the end of the financial quarter!
Some people even buy new cars just before Christmas, because they know people will be spending their money on holidays or Christmas presents rather than going car shopping!
Choose your finance wisely
Apart from buying a brand new car in cash, there are a few ways that you can finance it:
- Leasing – you pay a deposit, a fixed number of instalments over a period of 3 years or so, and then hand the car back and start again, or pay off the remaining balance;
- Hire purchase – same as leasing, except at the end of the term you own the car outright. HP instalments are often higher than leasing ones, because you are spreading the cost of the entire car, not just a portion of it.