If you’re looking to make your money go further, buying a used car is a great option. The value of new cars depreciate quickly, meaning you can get some great deals on used cars that are just a year or two old.
What you’ll lose in getting to pick the specs and trims yourself, you’ll more than make back in value for money. Used car dealers like Inchcape offer a fantastic range of cars, across a number of marques and models, meaning it’s highly likely you’ll find just what you’re looking for. That’s not to say it’s totally straightforward. There’s a complex process to buying a used car, with a number of procedures in place and plenty for you to be looking out for. To make sure buying your used car is as enjoyable as it should be, we’ve put together this handy guide to see you through and make sure everything goes as it should.
What you’ll lose in getting to pick the specs and trims yourself, you’ll more than make back in value for money. Used car dealers like Inchcape offer a fantastic range of cars, across a number of marques and models, meaning it’s highly likely you’ll find just what you’re looking for. That’s not to say it’s totally straightforward. There’s a complex process to buying a used car, with a number of procedures in place and plenty for you to be looking out for. To make sure buying your used car is as enjoyable as it should be, we’ve put together this handy guide to see you through and make sure everything goes as it should.
Choosing a Model
With many great deals being offered on used cars, it’s easy to get carried away and go for something big or sporty. It’s important you don’t lose sight of why you need the car and what far. Remember to consider:
- Is it practical? It might look great, but does the car actually cater to your needs? If you’ve got kids to think about, or a lifestyle that requires a certain amount of boot space, don’t forget to consider these – they’re the basics.
- Is it affordable? You don’t want to end up with a car you can’t really afford. Even though the purchase price of many used cars looks attractive, you need to consider what they’ll cost to run (more on those later) once you’re off the forecourt. Weigh up things like estimated fuel consumption and road tax against your monthly and annual budgets. Don’t forget to check the car’s history and insurance band – both will massively influence the size of your car insurance premium.
- Is it suitable? To some people, a car is simply a means of getting into town and back. To many it’s a country-crossing machine, ready to tackle the several-hours’ commute, and to others it’s purely for pleasure. Maybe you’re two of, or all of the above. But take this into consideration when choosing your used car. You don’t want to end up with a car that’s much more or less powerful than you really need.
- Is it really what I want? It’s easy to be drawn in by a bargain, or by a car that’s a bit flash, but don’t forget what your priorities are. If you’re environmentally conscious, are you willing to compromise on emissions just to get a good deal? And though that model might offer you – the driver – a great experience, will it be okay for the kids?
The Test Drive
It’s absolutely essential that you test drive any used car before buying. You may have a handful of models in mind, or might want to test drive a couple of the same specs and model to see which drives the best. Don’t be afraid to ask for as many test drives as you like, it’s vital you’re happy with what you’re buying. When you get out there, we suggest you:
- Ask plenty of questions. Before you’ve gone anywhere, ask your salesperson to show you around the car. Question any unusual or innovative features, and comment on any major signs of wear or damage.
- Perform an inspection. Any used car dealer is obliged to check the car is in good working order before putting it to market. But feel free to give the car a good once over yourself. Pop open the bonnet and check everything looks right, and ask your salesperson to talk you through it. If anything looks worn or unclean, make sure you question it. Take a look at the tyres too, check their tread depths to get an idea of if, and when, they may need replacing. If you can, get a good look at the thickness of the brake pads.
- Adjust. Feel free to alter the seat and steering wheel position or you won’t get the full experience. You simply won’t enjoy driving a car that doesn’t fit you.
- Mix it up on the road. If you only meander along A roads you’re familiar with, you won’t get a true taste for how the car drives and handles. Be sure to challenge it, taking on everything from motorways to narrow country lanes.
- Bring someone along with you. There’s no harm in getting a second opinion. If you’re going to be spending most of your time in the car in the company of passengers, it’s good to know how it fits and feels for them.
- Test the brakes. The single most important feature on any car, aside from the wheels, it’s especially important to check the brakes on a used car. They’re pivotal in keeping you, your passengers and others safe, so check that they feel right. Some wear is only natural, but be sure to raise it with your salesperson if you think there’s something wrong.
- Trust your senses. How does the car look? How does it sound? How does it feel to drive? These are your best indicators of the car’s true condition. You should be able to trust your intuition.
- Take all the time you need. It’s important you get plenty of time to really suss out a used car. Don’t be pressured into getting it back to the dealership after a 10-minute spin.
Finance Options
There’s a great range of finance packages for you to choose from when you buy a used car. Which you go with may depend on the value of the vehicle, or how you wish to split and stagger your payments. It’s also worth consider how long you intend to own the car.
- Personal contract purchase (PCP). When you choose this financing option, you put down a deposit and agree a contract length and mileage allowance. These are then used to calculate what the car’s value should be come the end of the contract – its ‘projected value’. This is put to one side until the contract’s over, and the remaining balance is split into monthly payments. At the end, you can either by it out and take ownership, use the equity as the deposit on your next car, or hand the car back to the dealer.
- Business contract hire. As its name suggests, this type of financing is for business customers. It’s useful because there’s no obligation to buy at the end, and maintenance costs can be added to the monthly payments. You agree your rental term and mileage allowance then place the deposit – the larger the amount you put down upfront, the smaller your subsequent monthly payments will be. When the contract ends, you just give the car back to your dealer.
- Hire Purchase. This works in a very similar way to a mortgage. You put down an agreed deposit, agree to a term, then pay off the balance in monthly instalments. When you’ve fully paid it off, it’s yours to own. A popular form of financing, many opt for it because there’s no mileage limits added.
- Balloon hire purchase. This works in much the same way as hire purchase, only that a significant ‘balloon’ final payment is due upon completion of the arrangement. This means your payments while the contract is active are much smaller. You can’t hand the car back to the dealer, you are obliged to make the payment.
- Advance payment plan. This is aimed at business customers who would like to own their vehicle outright but would rather defer some of the cost. With this type of plan, you set a mileage allowance and contract length, before a guaranteed future minimum value (GMFV) is calculated. There are no monthly payments. The GMFV is set aside but the remaining value is paid up front. Come the end of the contract, you can choose to either pay the GMFV or hand the car back.
- Buy outright. Some models of used car come in at extremely affordable prices. For these, it may simply be more straightforward, more convenient and may save you money to buy outright. Even if you’re not in a position to buy right now, for some used models it might be more sensible to wait and save, than to enter a payment plan that you don’t truly need.
Running Costs
When you invest in a used car, there’s more than just the purchase price to think about. Whether the car is truly affordable will depend on whether you can cover the running costs. These can be split into two categories; ‘standing charges’, and actual day-to-day ‘running costs’.
When it comes to standing charges, you’ll have to pay these simply for owning the car you do, and what they amount to is dependent on a wide range of factors:
- Insurance. Unless your vehicle is to remain off-road or be declared SORN, you must have car insurance by law. There’s different options available when it comes to cover, and the extent of the cover you’d like is entirely up to you. Your premium will vary based upon a number of factors, such as your age, the model of car and where you live.
- Road tax. A new road tax rate structure was introduced from 1st April 2017. At this moment in time, the vast majority of used cars will not fall under this, and will be covered under the two previous systems. For cars registered before 1st Match 2001, the rate of tax you pay will depend on the engine size, while those after this date but before April 2017 will depend on fuel type and emissions. Find our more on the GOV.UK website >
- MOT. Any car must pass an MOT for every year after the third anniversary of its registry. Many used cars will have passed this, so it’s worth considering MOT and maintenance costs as something you may incur sooner rather than later.
Then there are the costs relating to useage. These will depend on the age and model of your car, and how you use it:
- Fuel. The size of your fuel bill will depend on how much time you spend driving. The fuel efficiency of your car, and what fuel it uses will also be factors.
- Replacement costs. When buying a used car, you should consider that your vehicle may need replacement parts soon. There’s a chance that your car may be covered under some form of warranty, but particular parts will inevitably need replacing at certain mileages. Depending on what form of insurance you have, the part and reason for replacement – costs may be covered by your insurance. In which case, you’d only have to pay the excess.
- Servicing. With a used car, you have to accept that incurring servicing charges is a strong possibility. Many cars come covered by a servicing pack. These are tied to the vehicle and not the owner, so always ask your dealer whether one is still valid on the vehicle – it could contribute to or cover your servicing costs for a set timeframe.
How to Save Money
If you’re looking to save money on your used car, there’s a number of factors you can consider that should help bring down the price:
- Petrol cars are usually cheaper at the pump. In the UK, petrol is almost always cheaper than diesel. This means petrol cars often benefit from a reduced running cost.
- Hybrids are much cheaper to run, but come at a high purchase price. Because hybrids are technologically advanced, they tend to cost more than petrol and diesel counterparts and hold their value well. That means you can expect to pay a high price for a used hybrid or electric vehicle, but will be rewarded with much smaller running costs – with fuel, insurance and tax usually coming in cheaper.
- Smaller cars tend to be cheaper to insure. All cars are given an insurance group – a number between 1 and 50. This is calculated based on performance, safety features and parts costs. Generally, this results in smaller cars coming in between 1 and 10 – the cheaper groups – while SUV’s occupy much of the higher groups. Check your desired model’s insurance group here >
- Go for the appropriate engine size. Generally speaking, a larger engine edition of the same model will burn through more fuel. Though it’s important to consider how you’ll use the car. If you’re car’s just going to be for zipping about town, a smaller engine is ideal. But if you’re going to spend most of the time powering across the country on motorways, a larger engine is better suited, as a small engine will have to work overtime to do this – burning much more fuel in the process.
- Go older. As cars age, they continually lose value. That means the older the used car you choose, the cheaper it’s likely to be. Bear in mind however that older cars are much more likely to land you with a sizeable repair bill come MOT day.
Paperwork
Before you take on a used car, it’s vital that you gain access to all the appropriate paperwork and thoroughly check these for any discrepancies or issues. This will include:
- Finance package. If you’ve chosen a finance agreement, make sure you’ve got the relating documents and have read and understood them thoroughly before you sign.
- Logbook/V5C. This is issued by the DVLA and acts as proof that you are the keeper of the vehicle. For a second-hand car, this will provide important information about its previous ownership and any modifications that have been made. Be sure to check this over thoroughly before purchasing any used car. Then, you’ll need to request an updated version that lists you as the car’s current keeper.
- Servicing booklet. The servicing booklet will tell you all you need to know about the vehicles service history. This is both for your reference as a buyer, so you can be made aware of any potential issues, and as an owner going forward. If any problems do arise, you should refer to this to help indicate to yourself and any garage you use what the issue could be.
- Car manuals. Cars are becoming more complex than ever, so make sure you’ve got the correct manuals for your vehicle to hand. It’s a good idea to have given these a good look through before you get behind the wheel.
Checklist – What to Look Out For
Unfortunately, buying a used car isn’t without risk. When you buy from an approved used car dealer, there obliged to thoroughly inspect the vehicle for any potential problems or illegal activity. That does mean they’re often the safer choice, but if you’re going ahead with a private sale it’s important you look out for:
- Clocking. This is an illegal practice whereby the odometer on the car has been wound back. It’s done to try and increase the resale value on a high-mileage car. Even just 1,000 miles removed can inflate the car’s value substantially.
- How to tell: Most cars average around 10,000 miles a year. Does the figure on the odometer fit with the age and appearance of the car? Consider the wear of the car, count any scrapes and scratches on the outside, and check how worn the steering wheel is. In your documents, check the service records and MOT history – previous mileage readings should be listed there. If you have any doubts, walk away.
- Cloning. Another illegal practice, this is where a car is given the identify of another by replacing the number plates with those from an almost identical vehicle – of the same make, model and colour. It’s done to avoid everything from parking tickets to speeding fines and congestion charges. If you end up buying a cloned car, you’ll lose the vehicle and all the money you paid for it.
- How to tell: Any car without a V5C document is a tell-tale sign, those these can still be forged. Check the car’s service history is consistent with its wear and age. There are online checkers you can use, such as that offered by the AA, for a small fee.
- Cut-and-Shut. This is a highly illegal practice whereby the remains of two or more cars, which in most cases have been written off, have been welded together and given the identity of one of the wrecks. It’s carried out by professional criminals and can be hard to spot.
- How to tell: Look out for uneven panel gaps and poor paint matching, as well as paint overspray on glass or trim parts.