In’s & Out’s Of Purchasing
Do you know what to do when your looking around dealerships? Do you know how much your old car is worth? Do you even know what your looking for or how much it will cost?
Most people, if they’re being honest, have to answer ‘No’ to some or all of these questions and that’s what this, admittedly rather bland, article will be about.
For some, buying a car is a a process that seems as simple as quantum physics, and for a few really unlucky ones, it seems even more complex than that! However it will surprise many to know that it’s a very simple thing to understand and get a damn good deal out of, if you’re prepared to put in the extra bit of effort required.
Ok, so let’s start with the car you currently own.
Most people, including me, can’t buy a new car before selling the old one first. So what do you do? Many will use it as part-exchange on the new one.
Basic part-exchange or ‘part-ex’ is simply a discount on the list price of the car you’re buying, so if your car is worth £1,000 and the car you’re buying is worth £3,000, then the simplest part-ex means you give the trader your old car and the new car costs £2000.
Most people don’t have the cash to pay for a car upfront, so dealers basically loan you the money and you pay it back over time with a percentage on top, so be aware that finance on £3000 means you’ll pay more than £3000. Be aware of this interest rate and be prepared to negotiate on it.
Or you can sell your car privately through eBay, Autotrader or the many many advertising and auction places out there. They all work on a percentage fee basis, allowing you to advertise your car and they take a slice of the price you sell it for.
This is a great way to sell a car as a private sale will usually net at least 10% more than if you used it for a part-ex deal.
Researching:
To get rid of your current car in either of the above circumstances means knowing what your car is actually worth. Do you know what your car is worth?
Again, your honest answer is likely to be ‘No’. Even if you knew what it was worth when you bought it, it doesn’t mean it’ll be worth anything near that now, particularly if you bought it new.
So this is where that little effort is required, as you need to do your research.
The easiest thing to do is to consult the very places you’ll look at when searching for the replacement to your existing car.
Autotrader is one the best places as you can find your exact car, then it is simply a case of finding the trim level and engine of your car and is an excellent place start, however you need to know everything about your car. You can tell the obvious things like whether it has a CD-Player, Air-Con, and alloy wheels, but how many airbags does your car have? Does it have power steering? What equipment is standard, what is extra? These are things many people don’t know, especially if the car has been purchased second hand.
For this, you need a slightly more comprehensive website, for me personally I go to Parkers.They primarily review cars, but go into detail about the specifications of the cars they review, which includes detail about the equipment list of the various trim and engine levels of many makes and models. This detailed level of information means you can see what is standard and what, if anything, is extra. Along with this, the review section also shows a rough depreciation graph suggesting what the model would be worth over each year of it’s life.
Now you know a little about your car you need to get on with making it sellable. Firstly you need to give the car a thorough clean, both inside and outside and get the car serviced or ensure basic maintenance has been carried out, such as an oil change/top up, water level check, and fuel & oil filters as well as checking tyre and brake conditions.
For many, the price of a service may seem pointless, but if the car appears clean both inside and out and has recently had some sort of basic maintenance carried out, it can help secure that extra bit of value. Trust me, that little bit of effort will help enormously.
A little research into the value of your current car will arm you well when you come to deal with dealers. If you go in knowing exactly what your car is worth, both statistically and in real, market terms, then you will know whether the dealer is trying to sell you short or is offering you a genuine price for your car.
Be aware, that the dealer has to think about how he will sell the car on, which is why you have to expect to get a little less than you would if you sold the car privately.
At some point you will apply the same research process to finding the sort of car you want to replace yours with. If you don’t, a dealer could tear you apart and sell you a car that isn’t what you really want and sell it to you for several hundred quid more than he should have. Always make sure you know what you want, but we’ll come to that later.
Terminology:
This is the area where most people are seriously intimidated. All those abbreviations and terms that seems to be a list of gibberish. It’s nothing to be ashamed of, and if you can learn a few of the basics, you make sure you have the best chance of finding the car you want.
Of course, almost everyone knows what ‘ABS’ means, or at least what it represents, but what about ‘EBD’ or “ESP’? ‘TC’? ‘EW’? How about ‘PAS’?
Didn’t think so, so below is a nice little table that’ll help you get the common ones, and a few less common ones as well.
Learning these 20 or so abbreviations will give the ability to appear as if you know your stuff and all you need is for it to look like you know your stuff.
Also be aware things like Traction Control have many different names as quite a few manufacturers give their own name to their own system.
Negotiations:
Ok, your car is ready, you know what you’re car has on it and how much it should be worth, time to get out and onto the forecourts and to meet the dealers and salesmen.
When it comes to negotiating, or ‘haggling’, many people are either too scared, too lazy or feel they have no bargaining room to be able to haggle. The first two are easily solved by realising a few simple facts; firstly, no matter how nice and friendly the dealer might be, they are still wanting to give you as little as they can for your old car and sell the new one for as much as possible because this is how they make their living. Secondly, you are the one with the power, not the dealer. You are the customer. Without you, they sell no cars and make no money and go out of business. Finally, never be afraid to tell the dealer ‘No’ and walk away, you are the customer, it’s your money that’s going on the car, not theirs so don’t be told what you want or need. Keep these facts in mind when you go out to any dealer.
Don’t be afraid to tell the dealer that your car is worth more than he’s offering. If you know your car can be sold for £1000 and they are offering £500, you know they are trying to con you out of your car’s value, so tell them. Tell them it’s worth £1000, or that you’ve been offered more somewhere else. You’ll be surprised how quickly they’ll change their offer to you. The other thing NOT to do is admit any damage or faults with your car. If one of the electric windows doesn’t work, you haven’t got it repaired and they don’t check it, then that’s their problem. You want the maximum value you can get for your car and if they can’t be bothered to check the car properly, then why should you tell them? They might be lovely, very friendly people but they are still a business wanting to make profit from you, don’t help them any more than you have too.
Again, don’t be afraid to negotiate, if you’re sitting there thinking your car is worth more than what you’re being offered, say so. If it’s got plenty of optional extras and you’re being offered the value of a stock example, tell them so. Remind them that your car has those extras and ask them why they’ve offered you that price and ask them to reconsider.
An experienced dealer will know the signs of an easy sale and even if you are an unsure buyer, there is no need to advertise that. You’ve taken the time to learn about your current car, but what are you looking to replace it with? A car, obviously. But what car? A saloon, a hatchback, an estate? A petrol, a diesel? What does it need to have? CD Player, air-con, power steering? Do you want to get the same brand or are you put off certain brands? And importantly, how much are you willing to spend?
Again, do your research, know what kind of car you need and find out who are the good, the bad and the terrible models in the category. If you want a city hatchback, is a Vauxhall Corsa the best choice or are there alternatives that are as good or better that you don’t know about? If you’re armed with this information, you are in a position to be able to tell the dealer exactly what you want and need. It will tell them several things; firstly, you know what you’re talking about, even if you only know about a few cars that you’ve put onto a short-list, and secondly they’ll know that they can’t just sell you anything at any old price.
It will probably surprise you to know that most dealers know surprisingly little about cars, they in fact usually know about the cars on their forecourt and very little else. I’ve come across dealers that sometimes don’t even know that much and I’ve been able to tell them about the car I’m interested in.
Test the dealer, do a little looking around, go away and research the cars you might be interested in then come back and question them on those cars, you know the answers, but do they? If they don’t, you strengthen your position even more, so when it comes to negotiating the price you are the one with the power.
Again, don’t be afraid to tell the dealer you’re not interested in their offer and walk out. Which ever way you cut it, they’ve just lost a potential sale. Certain cars, because of their popularity or brand are difficult to haggle and the dealer will know this. It’s at this point you have to be rather clever.
Negotiate in stages, it’s hard work and can be tiring but persevere. Negotiate your old car first, press them for as much value as possible, pitch part-ex offers against each other and see if you can wangle a good price.
Then move onto the price of your new car. If they are refusing to budge on the up front price, see if you can get a better finance rate. If at any point they have to go ask their manager, it means you pressing them hard. Asking to speak to the manager is card you can play yourself with a stubborn salesman, but it’s a one time hit, use it on the value of your car and you’ll struggle to get them to budge further on.
With the prices fixed, the dealer will think he’s got his sale, now it’s time to really turn the screw and discuss extras. This is usually the point buying any car is finished, but there are still certain things to be gained.
Lets say you’ve just agreed a deal for you old car and your new one, how long is the tax going to last on the new car? When will it need an MOT? How much fuel does it have on board? Main dealers usually have MOT and servicing facilities on site and often get discounts on fuel, so use that. Most dealers do now service and MOT a car as a matter of course, but make sure ask the question, test them. A short amount of time left on the current MOT means the car has had a year to develop issues and problems, you don’t want to buy a white elephant after all so make sure an MOT and at the very least a service is done before you take the keys.
As for fuel, well prices at the pumps are bloody expensive and you still want a good bargain. If you’ve noticed that car your buying is nearly on reserve fuel, then make sure you point that out and point out that you’d prefer a full tank, safe in the knowledge you’d be happy with half a tank.
The same can be done with your old car. Why give them a full tank of fuel? Run the car as close as you can, don’t give it away with anything more than quarter of a tank of fuel. Why? Because the dealer is thinking the exact same thing.
With that done, no matter how intense the negotiation has been and whether you have come to an agreement or not, be sure to smile and shake the dealers hand. At the end of the day, their job is to make money from selling cars and you want the best deal for your money. It’s nothing personal at the end of the day.
Conclusion:
This is simple, and hopefully this message will have stood out; do your research and know what you’re negotiating on and for, whether it’s your current car or the one you want.
All this may sound like hard work and to some extent you are right, but then a car is an significant purchase. It’s not like you’re buying a toaster or a kettle, statistically only buying a house or having a wedding is larger financial investment.
The other thing to remember, is the car you buy will be your car, so taking the time to know what you want and how to get it is important.
Simply follow these points and you should get a decent deal:
1. Know what your car is worth in the current second hand market.
2. Lavish a bit of TLC on your old car before selling it.
3. Know what sort of car you want to replace it with, draw up a short list of 6 or more cars and research their value.
4. Go out and look at some cars, get yours valued, then go home and think about it all.
5. Go back to the dealers who offered you good deals and bag a test drive.
6. Negotiate. Negotiate your old car, negotiate you new car, negotiate the finance and negotiate the extras.
Follow the process and you’ll generally be pleased with what you end up with and you might even find it an enjoyable process. And if you are still too scared, take someone with you who knows and understands the process and provide you with moral support.
MD
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