That’s why we’ve compiled our comprehensive new car buying guide. At My Car Credit, we understand that buying a car is a significant investment, which is why it’s essential to take the right approach from the start in order to save money in the long run.
Below, we’ll offer our top advice on buying a new car, covering everything from how to maximise value and avoid common pitfalls to a blow-by-blow account of what to consider when test driving. Read on for all the information you’ll need to find out the best way to buy a new car!
Start with your budget
Establish your budget
First things first – determine your budget.
There are two main kinds of costs you need to consider – upfront and ongoing. You’ll need to account for both of these in order to set a realistic budget.
The main financial costs associated with a vehicle include the upfront cost of the car (or your deposit), car financing monthly repayments, fuel, tax, insurance, service and maintenance fees, monthly depreciation, MOTs and parking permits.
Top tip: Allocate 10-15% of your monthly income for ongoing car-related expenses.
Thankfully, there are many useful tools to help you estimate the cost of running a car, like this gov.uk service.
We’ve also got plenty of advice on finding the right car for you – check out our selection of the most underrated cars for under 10k.
You can benefit from favourable deals on cars at certain times of the year, too.
Use My Car Credit’s car finance calculator
Before you begin searching for your next set of wheels, you’ll need to work out how much you can afford to pay upfront (a down payment) and how much you can afford to pay monthly.
If you’re considering car finance, it’s wise to work out your mileage. Certain auto finance agreements have mileage limitations, so knowing these before you start your search can help you find a suitable deal for your needs.
Our car finance calculator can help you do the maths on your next drive. It’ll give you an instant breakdown of your expected monthly payments, typical rates and total payable.
What car should I buy?
Identify your needs
Shopping for your next set of wheels is exciting, but before you hit the forecourts, identify your driving needs.
Consider your lifestyle and mileage needs as a priority. For example, if you have a family, your priorities will differ from those of a first-time driver.
Your driving preferences are also important to account for:
Thinking through these kinds of questions before beginning your search can save you valuable time and effort.
New vs. nearly new cars
New cars have significant appeal – and it’s not just that ‘new car smell’. You’ll benefit from the latest technology, a full warranty and can choose the make and model you want.
But car depreciation is a real thing, which is why ‘nearly new’ cars are increasingly popular.
‘Nearly new’ is a broad term that can cover a range of different vehicles. Broadly speaking, nearly new cars are ex-demonstration or pre-registered vehicles. Ex-demonstration cars are the vehicles that customers will use to test drive a make and model. That means they’ll have a degree of mileage but will have been well maintained. Pre-registered cars are purchased by dealers to meet sales targets. They’re then sold on at a discount after a specific period. As such, they typically have fewer miles compared to ex-demo vehicles but may have been sitting around a bit longer.
Nearly new vehicles offer benefits like lower mileage, competitive prices and great car finance options.
Always do your due diligence when shopping around for a used car, ensuring you choose a good car dealer and are ready for polite negotiation.
Fuel type
More drivers than ever before are switching to electric cars. Low running costs, minimal noise pollution and a better environmental record than petrol or diesel vehicles are all factors driving motorists towards electric vehicles.
Plug-in hybrid vehicles are equally sought after, but offer greater range and a quicker refuelling experience than electric cars.
That said, petrol and diesel vehicles remain popular, especially for those looking to purchase nearly new cars. Petrol cars are typically cheaper than diesel and are ideal for nippy urban vehicles making multiple stop-start trips.
Safety and reliability ratings
Do your research to check the safety and reliability ratings for your next set of wheels. New cars can really differ between how safe and reliable they are – in fact, it’s not uncommon for smaller city cars to score much lower in the European New Car Assessment Programme (Euro NCAP) crash tests.
The Euro NCAP awards star ratings to cars after testing how much protection they’ll provide motorists in the instance of a crash. With that in mind, you can use the Euro NCAP latest safety ratings to review the stats on any model you’re eyeing up.
You can also check out other customer reviews to gauge other drivers’ experiences of different makes and models.
Understanding your payment options
No new car buying guide is complete without a breakdown of your payment options. We list the most popular ways of financing a car below – the most suitable one for you will depend on your needs and circumstances.
Cash purchase
If you’ve got the upfront cash to pay for a car in full, you’ll benefit from no interest payments and full ownership from the get-go.
However, most drivers don’t have the money to pay for a vehicle in full. Even if your vehicle isn’t brand new, it’s still a sizable financial outlay. That’s why so many drivers are turning to car finance to fund their next set of wheels.
Hire purchase (HP)
HP car finance is one of the most popular agreements for UK drivers – and for good reason. You’ll benefit from fixed monthly payments and interest rates, and you’ll own the car at the end of term without having to make a large balloon payment.
There are no mileage restrictions, making HP ideal for drivers looking for long-term ownership, and this kind of finance agreement is good for people with less-than-perfect credit scores too.
Personal contract purchase (PCP)
PCP is a popular finance option for drivers who like to regularly switch up their car for a higher spec, newer upgrade.
Fixed monthly payments on PCP are lower compared to HP agreements, and you’ll benefit from flexibility at the end of the repayment term. Choose to return the car without making the optional final payment, keep the car and pay the balloon fee or part exchange the vehicle.
Leasing (personal contract hire)
Also known as personal contract hire (PCH), car leasing is essentially a long-term rental agreement.
You’ll benefit from low monthly payments, but there’s no ownership option at the end of term. As such, you’ll face restrictions like mileage limits and wear and tear charges.
PCH is a popular finance agreement for customers who enjoy driving new cars without a long-term commitment.
Where to buy a new car
There’s no one best way to buy a new car – it depends on your preferences and needs.
Typically, most UK motorists will find their next set of wheels in the following ways.
Franchised dealerships
You should be able to find authorised dealers offering new cars with manufacturer warranties, and dealers selling nearly new and used vehicles.
Be prepared to haggle when you go into a dealership – it may save you valuable cash. Go in prepared and having done your research, as this will stand you in better stead when negotiating. You should also shop around different dealers to get the best rate for you. Offer an amount that’s lower than you’re prepared to pay, as this gives you wiggle room. Always be firm but polite, and be ready to walk away – you may be offered preferable rates by doing so.
Online car retailers
There are a wide range of online car retailers where you can purchase a car, including sites like eBay and Gumtree.
Online car retailers offer a convenient and quick browsing experience, with benefits like home delivery and the comfort of buying from home.
Always be cautious when buying online to avoid scams. You can check the status of a vehicle on gov.uk – this tool will show you a vehicle’s last MOT and tax date, indicating whether the licence plate matches DVLA records.
Remember to test drive vehicles before final purchase and establish your rights before signing any contracts.
Car supermarkets
Car supermarkets are becoming ever more popular. They typically sell nearly new and used cars at competitive prices.
You may not benefit from a full warranty with vehicles sold in car supermarkets, so always do due diligence and check before agreeing to a contract.
Car auctions
If you’re savvy about buying nearly new or used cars, car auctions may offer you serious savings. However, if you’ve never purchased at a car auction before, have caution to ensure you don’t risk being scammed.
My Car Credit’s trusted dealer network
Use My Car Credit’s My Car Search to find your next set of wheels. Our extensive network of FCA-vetted dealers is UK-wide, helping drivers across the country source high-quality, reliable vehicles.
Just fill out the simple search criteria and we’ll highlight the best options for you, helping you secure both your next car and its finance agreement in one go.
Test driving a new car
Test driving any vehicle is essential. There’s no other way to gauge whether you like a car make and model without hitting the road and trying it out first.
Our ‘must do’ checklist for any test drive includes:
- Check seat comfort and driving position – Adjust the seat and steering wheel and ensure overall visibility via both the windows and mirrors. Establish the accessibility of all infotainment and functional controls.
- Check the function of the vehicle – Are the brakes and clutch properly functioning? How is the suspension and steering? Do you have the acceleration and power you need?
- Observe engine noise levels – You shouldn’t hear any buzzing or rattling.
- Consider other factors – Like boot space and whether there’s room for a child’s car seat if required.
You should be able to schedule test drives with multiple dealerships to find a car that works for you. My Car Credit can also help connect you to trusted dealers, helping you find a trustworthy seller with ease.
If you’re purchasing a used car, you should comprehensively check the vehicle before test driving. Inspect the car’s overall condition, mileage, oil, engine, tyres and paintwork. Test the radio and lights. Internal checks are just as important as external.
Watch out for ‘Category N’ cars (previously ‘Category D’). These are vehicles that have formerly crashed without structural damage. However, they may still need vital replacement parts, which often explains why they’re listed so cheaply. If the price seems too good to be true, always ask questions.
Car depreciation and resale value
We mentioned car depreciation above – but what does this actually mean?
Depreciation refers to the decrease in a vehicle’s value over time, effectively indexing the difference between the amount you purchase it for and the amount you can expect back.
New cars will depreciate as soon as they leave the forecourt. Estimates suggest that an average new car loses between 50 and 60% of its value in the first three years of use. That’s why many motorists opt for nearly new or used vehicles, as they hold their value better than brand-new cars.
That said, there are other factors that decrease a car’s value over time.
Brand reputation and market demand will impact a car’s value. So will other variables like mileage, condition, wear and tear, and a vehicle’s maintenance history.
You can minimise your car’s depreciation in a few key ways:
- Opt for popular colours
- Avoid excessive customisation
- Avoid smoking in your vehicle
- Ensure a regular maintenance and service history
- Frequent long journeys will also reduce your car’s value
Remember, nearly new vehicles offer a great way to get behind the wheel of a car that’s just below top of the range and won’t experience significant initial depreciation.
Apply for car finance with My Car Credit today
Now you know the best way to buy a new car, you can start exploring these options for yourself. At My Car Credit, we prioritise finding users flexible and transparent car finance agreements.
Our online application process is quick and straightforward, giving you an instant decision in mere minutes. Any initial credit check is only ever a soft search meaning it won’t negatively impact your credit score. Plus, any quote we provide is no-obligation, and the rate you see is the rate you get.
We combine a broad panel of trusted lenders with a sensible approach to lending to help drivers across the UK secure competitive rates and personalised solutions.
Find out how My Car Credit can get you behind the wheel of the right car for your needs by filling out our online form today.
