How To Buy A Car

Hundreds of thousands of people are likely to buy cars after the new "59" number plate is released today, with more than two million being sold last year. But many motorists will pay far more than they need to because they fail to choose the best means of financing the deal before they buy.

A new car is the second most expensive purchase many people make, after their home. So, consider your options carefully before signing on the dotted line. Surprisingly, research from the motor insurance group esure shows that nearly a third of buyers do not even haggle over the price of a new vehicle, and only one in 10 spends more than an hour researching finance options

"With the cost of motoring on the up, it's more important than ever for drivers looking to change their car to make sure they get the best deal," says esure's Mike Pickard. "Whether it's bargaining on the forecourt or researching the right finance package or insurance policy, an hour or two of research at home can make a real difference to your wallet."

Buy Ford Mondeo

Your dealer may offer you a trade-in value for your old car, but this is likely to be less than it could fetch on the open market – provided you can find a buyer. Before agreeing to trade your old vehicle as a deposit, it is worth advertising it on free websites such as gumtree.com and ebay.com to see if you can obtain a better price. If your car is worth less than £1,000 and is more than 10 years old, consider taking advantage of the Government's scrappage scheme.
Once you know the make and model of the car you would like, contact your insurance company or, better still, look at price comparison websites to find out what it will cost to cover. Young drivers and those with convictions for traffic offences should beware buying flashy or fast models they cannot afford to insure.

Anyone who is keen to keep costs to a minimum should have a number of different models in mind and compare insurance costs before buying. It is also worth noting that if you have made insurance claims in the past, you may not be insurable on some more powerful models.
Having sorted your deposit or trade-in and your insurance, you must consider how you are going to pay for the car. Honest John, motoring agony uncle for The Daily Telegraph, says the best way of doing this is with cash. "People often get themselves into such a mess with car debt, but it's unavoidable for most."

Where you need to use credit, remember that the headline interest rate may not tell the whole story. You should also consider arrangement fees and any early exit penalties. Always compare both the monthly outgoings and the total you will have to repay.
"Each route will offer different benefits and drawbacks, so be careful," says Gemma Stanbury, head of savings, loans and debt at price comparison website Confused.com. "It's vital to know how much you'll pay back in total – that way you can check which way will be the most appropriate for you."

There are three main options for motor credit: you can get it from the dealer or a bank or building society. Many drivers take the easy option and sign on for the dealer finance package offered by the car salesman. While this may be the least time-consuming option, it is often the most expensive. Personal contract purchase, loan purchase and hire purchase are the three main payment options that a car dealership will offer.