Eight things to watch out for when buying a car

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It’s new car number plate time of year again so we’ve rounded up eight things to look out for if you’re in the market for a motor.

With new car number plates launched on the first of March, plenty of people may decide the time is right to buy a car – either fresh from the showroom or the classified ads.

However, buying a car can be a confusing process. Here are eight things you should watch out for if you do decide to upgrade your wheels.

1. Insurance costs

You might have been dreaming of buying a sports car since you were 10. However, before you take the plunge, it’s a good idea to consider car insurance premiums.

Cars with powerful engines are more expensive to insure. If you want to keep insurance costs down, consider a car that falls into a low risk insurance category such as a Fiat Punto or a Ford Fiesta.

Having safety features such as anti-lock brakes, airbags and traction control could also lower insurance costs.

2. Your payment options

Most dealerships offer buyers hire purchase agreements. This means you get the car straightaway but won’t actually own it until you have finished making repayments.

Although this is a popular way to buy a car, interest rates can be high. If this is the case, you might get a more competitive rate with a personal loan.

3. Don’t forget about car scrappage

As we told you in our newsletter two weeks ago, the government’s car scrappage scheme has been extended until the end of March.

Drivers of cars more than 10 years old get paid £2000 if they buy a new motor – with half of this money coming from the government and the other half from the car manufacturer.

The scheme had been due to end in February but you now have an extra month to cash in.

4. Beware of trade in deals

Car dealerships will often encourage you to ‘trade in’ your old car and get money off the cost of your new vehicle. However, some dealers may not offer you a competitive price for your old car.

It might be worth seeing if you could get a better deal with an online auction or by placing an advert in the classifieds.

5. Don’t be blinded by freebies

Don’t let freebies cloud your judgment when you’re buying from a dealership. Added extras such as cheap insurance or a free service might seem like a great incentive. Remember, however, most car salespeople work on commission and may have just thrown these in to seal the deal.

It’s the car you’re buying, not the extras…

6. The six-month shelf life

Your new car won’t be new for long. Come September, there will be another set of new number plates and you will no longer be driving one of the newest cars on the roads.

You should also beware of depreciation. As soon as your drive your car home from the dealership, it starts to go down in value. In fact, Tesco Bank estimates that a new car could potentially lose 40% of its value in the first three years of its life.

If you’re not set on a brand new motor, you might like to think about opting for a ‘nearly new’ model (anything up to a year old) or even a second hand car.

7. Your car’s hidden history

If you do go down the second hand route, remember to run a hire purchase information (HPI) check.

For a small fee, this service will tell you if the vehicle has ever been stolen, written off or has any outstanding finance against it. Remember, if the car has been previously written off, it’s unlikely you will be able to get insurance.

What’s more, a HPI check will also tell you your car’s current market value. This could be a great way to make sure you don’t get ripped off by an unscrupulous seller.

8. Modified motors

If you’re buying a second hand car, it’s vital you find out whether the vehicle has ever been modified as this could make it more expensive to insure.

Statistically, vehicles that have been modified are more likely to be involved in traffic accidents and more expensive to repair if they are – which causes car insurance to rocket.

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