Buying a used car is, without doubt, the most cost-effective way to get a car. Of course, there are some great new car deals out there but there is no escaping the fact that almost every single new car loses around half it’s value when it rolls off the forecourt. However, the used car market is huge and it is not without its pitfalls; knowing what you are doing and how best to buy used cars is important. This guide aims to arm potential used car buyers with all the information they need to get a great car at a great price.
Why buy a used car?
The main reason that anyone would buy a used car is because it’s cheaper than buying new. The value of a car depreciates significantly after its first year on the market and will continue to drop noticeably until the car is three years old. Depending on the make and model, the price of a three-year-old car can be as much as 30-55% lower than when it was new.</>
Older cars can be even cheaper, though the price decline won’t be so steep in later years. After five years a car’s reliability tends to drop off, given that most manufacturer warranties are 3-5 years long. As long as you’re thorough in your checks of any car you’re looking to buy, you can find some great deals on older models.
Types of used car
It is important to look at some clear distinctions and terms when it comes to used cars. There is a huge difference between buying a car that has only done a few thousand miles from a dealership and buying a car from eBay that has covered more miles than a motorway police car.
Nearly new still counts as used but many of the questions and tactics mentioned in this guide will not be relevant. However, the nearly new market only makes up a small portion of the used car sector. After around 10,000 miles every used car becomes something to buy carefully, so you need your wits about you.
Before you go to a dealer
As with any high-value purchase, it’s important to prepare before you commit to buying. In the case of used cars, there are a few things you can do before you set foot in a dealership.
The most important is to set a strict upper-limit on your budget. This will largely be determined by personal factors, but you should also research the kind of car you want and how much you would expect to pay for it. Bear in mind that the type of car you choose will have implications for how much you pay on things like tax and fuel in the future. Getting all of this straight first will protect you against spending more than you can afford or overpaying for what you end up buying.
Regarding the car itself, the range of things to check is broad; so much depends on the age and how you are buying the car. One of the biggest things to make sure you do, no matter what type of car you are looking to buy, is research. Every model and type of car will have reviews online, they will have common fault lists and even stats on repair bills and much more. The key is to know the model inside and out before even beginning to look at a car. It is generally not advised to go to a dealer without a clear idea of the car you want. Being shown cars on the day by a skilled salesperson can leave you buying a car that may not be quite right for you at best and be downright wrong at worst.
As well as knowing about the common faults and issues it is also important to research the trim and option levels. If you are going to buy a used car you should be aware of which variant has the most toys or the best in-car entertainment system. In the case of SUVs there are a number that are not all wheel drive but do not state it anywhere on the car. Many an unwitting buyer has driven around happily for a few months in a two-wheel drive SUV only to get stuck on a family camping trip. There are a number of websites that will state the entire model range, trim levels and if they change with certain years.
Another top tip is to look and see if the car has a tow bar. This may not seem like an important factor but a car that has done a lot of towing is likely to be far more worn out. The clutch and gearbox will have taken a lot more punishment as will the suspension. It might not be a deciding factor, but it’ll help you find out more about the car. Towing a trailer once a year is fine, but towing a caravan every week may not be.
Questions to ask when buying a used car
There are a lot of pertinent questions you can ask when you are looking at a used car. Many can actually be asked prior to visiting the car. It can be a wise move to ask a few questions over the phone before going to see the car to save time and effort. It is also good to show the seller you are no fool and expect an honest car.
- Ask the seller how many owners the car has had. It should be something included in the paperwork, but it’s a good question to ask to get an idea about the car. Lots of owners and only a relatively low mileage can give a signal it’s a problem car.
- Ask what garage they have the car serviced at. This is very useful because you can easily call the garage and ask if they remember the car. Some mechanics may well be keen to tell you there are issues or even outstanding money owed for work on the car.
- Ask what sort of driving the car is used for. It is useful to know if the car has been used for simple commuting or perhaps lugging handyman tools and equipment around all day. This question can include what sort of journeys it is used for. Motorway miles are less hard on a car than lots of short trips.
- Of course, it is useful to ask why they are selling the car but this question is unlikely to elicit an honest response if there is something wrong.
- One question that can tell a lot is to ask about MPG. An owner who knows what mileage they get from a tank of fuel is likely to be a conscientious one. It can be telling too if they say a lower number than your research tells you. This could suggest they drive the car hard and that can have a substantial effect on wear and tear.
Perhaps the most important thing to do before you agree to buy a car is taking it for a test drive. This is your chance to see if you actually like driving the car, as well as to check for problems your initial inspection might not have revealed:
- Steering – does the car handle as expected, or does the steering pull to one side? If it doesn’t feel right, it could be a sign that the wheel alignment is off or there’s an electrical fault.
- Funny noises from the engine or brakes – it could be nothing but age or it could be a sign of a bigger problem. Either way, you should investigate further if something doesn’t sound right.
- Seating position – aside from technical issues, it’s important that you’re comfortable when driving. Are you fully supported and able to comfortably reach both the steering wheels and pedals?
- Controls – you should also check that you can reach all of the controls and that you know how to operate key functions, such as lights and windscreen wipers.
While you’re out on your test drive, look at as many different things as you can and keep an eye out for anything that doesn’t seem right. There’s no point paying for a car that you’re not 100% sure of.
How to haggle over a used car properly
The art of the deal when it comes to buying a used car is something a lot of people worry about. In fact, it is very simple. With the wonders of the internet, it is easy to get a realistic market value for any car. Bearing this in mind, it is much easier to avoid getting ripped off. You also should also have a maximum budget in mind.
Do not offend people buy offering a silly low number, it will not help in the long run. Be reasonable; make it a good price with a view to a quick close. By dragging it out and working up from a silly figure you annoy the person and ultimately risk forcing the final price higher.
Don’t be afraid of silence! It is really important when haggling over a car to be ok to sit in silence with the seller. Once you state your final offer just ride it out. The first one to speak will lose the battle. Simply be polite and state a clear final offer and let the seller come to you. Be prepared to walk away. No matter how many other people they say they have coming to see it if the price is not right; walk. You can always call back in 30 minutes and buy it but the act of turning your back may just be enough to seal the deal on your terms.
Different ways to pay
There are several different ways to pay for a used car. It’s important to be aware of all of them so that you can decide what works best for your current financial situation.
Paying by cash (or, more commonly, debit card) is convenient if you have the money available. It means you won’t be tied down to ongoing repayments (plus interest) and you’ll own the car outright from day one. Being able to say that you’re a cash buyer also communicates your seriousness to a salesperson and may enable you to push the price down (more on this in the next section).
Car finance deals for used cars normally involve paying a deposit (around 10% of the total value) then paying off the rest of the car in monthly instalments, plus interest. This is also known as a hire purchase.
This way of paying is attractive to many people as it spreads the cost of the car over a longer period of time and is all organised through the dealer, but there are a couple of important caveats. The first is that your car may be repossessed if you miss a payment, so don’t commit to a deal that you aren’t sure you can stick to (this is why keeping to a budget is essential). The second is that it may be cheaper or more convenient to take out a personal loan first and pay the dealer in cash, so don’t assume that a finance deal is the only option if you can’t pay the whole price up front.
While not necessarily cheaper than most finance deals (due to interest), there are several reasons to look into a personal loan that would allow you to buy the car in one go. A major one is that you would own the car outright, so if it became difficult to pay off the loan you could sell the car and lose a lot less than if it got repossessed after a number of payments on a finance deal.
Other reasons are increased flexibility and more choice when it comes to the rates on the different loans you could take out. One option available to you would be to take out a loan for part of the cost of the car, allowing you to pay more out of your existing funds and have less to pay back in the future.
One point to bear in mind is that the money might not come through immediately, so you’ll have to plan when you need to take out the loan vs when you need to pay the dealer. You should also be 100% sure of how much you need to pay the dealer before you agree on the loan.
Best time to buy a used car
There is certainly a right and a wrong time to look at and buy a used car. But here are also different times of year involved too.
Firstly, never go and see a car in the dark. There is simply no way a person can truly see the quality of the paint work without daylight. No matter how busy you are buying a car in the dark is to be avoided at all costs. The same goes for rain. Perhaps less of an issue than light, rain can cover up all manner of sins when it comes to scratches and bumps. Rain also makes you feel uncomfortable and tends to rush things which is never a good idea.
When it comes to the time of year a little bit of logic goes a long way. A convertible is going to be more in demand in the summer. So it stands to reason prices will be higher. The same goes for SUVs in the autumn. The minute people get a splash of water on the roads they all want an SUV and prices go up. If you want a niche car type like this then try to buy it out of season. It is less of an issue with saloons and family cars.
There are also certain times that dealers or individual salespeople are likely to bump the prices down so that they can meet their own targets. For example, you can often negotiate a better deal on Fridays. This is because weekdays are quieter than weekends and salespeople will be concerned about meeting their weekly targets.
The other time to look for a good deal is at the end of each quarter. Quarterly sales targets are very important for many salespeople and dealers, which can make them more willing to cut the price if they don’t think they’ll make the sale otherwise.
Buying from a dealer – consumer rights
Buying a used car and even a new car from a dealer means you are covered to a certain extent. This is all under the consumer rights act 2015. The act basically states a car must be fit for purpose and of a satisfactory condition. When it comes to used cars this condition takes into account mileage and age of course.
The key thing to remember is that you have 30 days to return a vehicle if there is a fault. In that time you can ask for a full refund. It can get tricky when the item might be considered wear and tear, because the dealer could suggest you have driven it harshly in the period you had the car. However, depending on the issue this would not stand up in court if it were false. The key is to take every precaution when buying the car to check for issues, which means insisting on a test drive.
Protection when buying from a private seller
The consumer safeguards don’t apply when you’re buying from a private seller. The only obligations that the seller has are to ensure that the car works, that it can legally be driven on public roads and that they have the legal right to sell it. Other concerns, such as checking that the car is fit for purpose and the quality you expect, is your responsibility to ascertain before you agree to purchase.
Buying a SORN-registered car
Buying a SORN car should not be an issue but it’s a little more complex than buying a normal used car. The first thing you need to do is arrange an insurance quote before buying the car. You then need to make sure it has a valid MOT. Once the money changes hands you will need to go online and tax the vehicle, agree the insurance quote and then drive it home. Once the sale has been made the SORN is lifted. It is critical you do not drive the car without insurance or tax. Thankfully, smartphones make all of this much easier. Everything can be done whilst sitting in a coffee shop or even in the passenger seat of the car before setting off.
Buying a category S or N car
Category S or N cars (formerly Cat C and D respectively) are cars that have previously been written off and may or may not have been repaired. These cars are often available at a lower price than otherwise identical used models and can be legally purchased just the same. Prior to deciding whether or not to buy one, you should know the pros and cons of doing so.
Before we go any further, it’s worth clarifying what each of these categories mean:
- Category S (formerly C): a car that has previously been written off because it suffered structural damage that the insurer deemed to be uneconomical to repair.
- Category N (formerly D): a car that has previously been written off because it suffered non-structural damage (such as an electrical or mechanical failure) that the insurer deemed to be uneconomical to repair.
Benefits of buying a category S or N car
The main reason to buy one of these cars is that they’re often significantly cheaper than other models, even when they’ve already been repaired to a roadworthy standard. In the cases where the car still needs repair, it may be that you can find a way to repair the car more economically than the insurer was able to, which would mean the overall cost is still lower than buying a different version of the same model.
Category S and N cars can often be bought at auction, which we haven’t really covered in this guide. In these instances, it can be possible to get a real bargain, but you need to remember that you’ll be buying the car ‘as seen’ which means you need to know exactly what you’re buying before you bid.
Risks of buying a category S or N car
Many industry experts advise against the average buyer purchasing a previously written off car. This is because it can be hard to work out the extent of the work that needs doing to make the car roadworthy and the costs can really mount up if you’re not careful.
Even where the car has been repaired already, some experts warn that you should be very cautious or even avoid category S and N vehicles. Simply put, there’ll always be the risk that the repair isn’t up to scratch, which means there will always be the chance of big costs in the future or even a serious accident.
Driving home after buying a used car
So you have paid for your new (used) car. It’s all very exciting and it’s time to drive home. But before you can do this you need to make sure everything is legal. It is absolutely critical you have insurance, a valid MOT and tax. The best thing to do is have all the websites set up on your phone ready to input details. If you have already bought the car and picking it up at a later date you can do all of this from home. Make sure you have email confirmation of everything; this can be shown to a police officer if you are pulled over. The other important part of driving a used car home is to take it easy. Listen carefully to the car as you drive, be aware of bumps and noises and try to double check everything. If the car is quite old or it has done a lot of miles it is useful to ask a friend or family member to follow you home. That way if anything goes wrong they can stop and help. Try to avoid picking a car up in rush hour; if there is an issue it is the worst time to have to stop on a major road.
All that being said, the simplest and cheapest option is often just arranging for the dealer to drop the car off. This way you have the time to sort out whatever insurance you need, and you don’t have to spend any extra money. In the majority of cases, this would be the best idea, though it’s helpful to be aware of your insurance options should you need access to your car immediately.
Summary: used car buying checklist
To finish off our guide, we’ve condensed everything above into a quick checklist for you to go through when you come to buy your car:
- Set your budget for either a full cash payment or monthly repayments (finance deal or loan). Be aware that you won’t always know how good a finance deal is until you speak to a dealer.
- Determine the type of car you need based on your requirements and preferences.
- Read reviews and compare prices to get an idea of your preferred makes and models.
- Check seasonal and industry trends to see if there’s a cheap time to buy.
At the dealership
- View any potential car in good weather and light, checking all bodywork for damage.
- Test the electrical systems.
- Check for a spare wheel/repair kit and original tools.
- Check for a handbook and spare keys.
- Examine the car’s service and check MOT history (if 3 or more years old).
- Run a car data check to be sure of legal ownership and selling rights.
- Take the car for a test drive.
- Check handling.
- Make sure the car sounds right.
- See if you can drive it comfortably.
- Check that you can reach and use all controls.
- If you plan to negotiate the price, be aware of seasonal factors that could affect the price and don’t reveal the upper limit of your budget.
- Agree on the final price and get it in writing
At or after purchase
- Arrange for the car to be dropped off, or get appropriate insurance cover.
- Contact the dealer as soon as possible if you notice problems that were there at the time of purchase – try to arrange a fix rather than a return if possible.