If you’re on the lookout for your next car, it can be a really exciting time! However, for many, the buying process can be a stressful time too! We want to help take the stress out of buying your next car and make it as simple as 5 questions to ask yourself before you buy. From setting a budget, to considering different fuel types, being prepared before you buy a car can help to save time and money!
1. Assess your needs
One of the first things you should do when buying a car is outline what you need from your next vehicle. For example, if you have a large family, you will need to find affordable 7-seater cars that fit in with your budget or if there’s just going to be you in the car, you may be better suited to a small city car with low running costs. You should also consider your mileage and how much time you spend on the road, because long motorway journeys could make fuel economy more important to you. Whittling down the cars that would meet your needs can save a lot of time when it comes to getting your next car.
2. Work out affordability
How much you can afford for your next car is really important and can be different depending on how you are going to pay for your car. If you’re buying with cash, it can be a much easier process as you know how much you want to save up or put towards your next car. If you’re looking to finance a car, you should set a realistic and affordable monthly budget. The general rule is your car should not cost more than 15% of your take-home pay to make sure you can comfortably meet each and every repayment.
3. Buy with cash or finance?
For many years, when it came to buying a car, cash really was king. It means you can own the car from the start, buy from a dealer or private seller and have no interest to pay. However, even used cars can now cost thousands of pounds to buy and many people don’t have this sort of income to hand. This could be one of the factors as to why more drivers are choosing to finance their next car. Car finance allows you to spread the cost of owning your next car into affordable monthly payments over a number of years.
4. Calculate the cost of ownership.
Once you’ve decoded how you’re going to fund your next car purchase, unfortunately the payments don’t stop there! You will also need to factor in the cost of ownership. In the UK, you will need a valid car insurance premium in place, have your vehicle taxed and also keep up with regular serving and MOTs to keep your car in good condition. There’s not much wiggle room on how much your car tax will be but some cars can cost more than others and some vehicles are even exempt from road tax, so it can worth comparing different makes and models for your budget. Car insurance premiums will also vary on the car you choose but also personal factors such as how long you have been driving and it can be more experience for first time drivers.
5. Should you get a new or used car?
If you’re debating buying a new or used car, it can be worth checking out the best deals on both new and used car. If you’re buying with cash, usually brand-new cars will be way out of your budget. However, used car monthly payments could be the same as a brand-new car on finance. This can depend on which type of car finance agreement you choose, as PCP deals can offer low monthly payments even on new cars. There are benefits of both new and used cars so it can be worth considering both types of cars and also exploring different financing options to see which would suit you best. Hire purchase is a great way to spread the cost of a car and then own it at the end and PCP is better suited to those who don’t care about owning the vehicle as you will need to pay a large balloon payment if you wish to keep the car.