There has never been a better time to buy a used car.  Due to the current economic climate prices of used cars have fallen dramatically.  There are certainly some bargains to be had but for every bargain there is a dodgy motor too.  Here are my tips for buying used.

Private Sellers

Most consumers will hunt the small ads in their local free papers for bargain used cars, or maybe internet ads on popular sites such as PistonHeads or AutoTrader.  The majority of these adverts will be for private sales.

Once you have found a car you would like to see it is time to make contact with the seller.  Beware of adverts only offering a mobile or email.  Always try to make contact via land line.  Tell the seller you are interested in the car he has for sale, if he says which car he maybe a dealer so beware.  Arrange to meet at the sellers address and take someone with you for security & company.

When you go to view the car you should consider the following tips.  Buying used privately you are not protected legally.  There is no part exchange, no warranty and no come back if things go wrong.

• Research the car you are buying.  What is standard equipment? Known problem areas? Used Prices? Sites such as Parker’s are very helpful in these areas.
• Don’t view a car in darkness or bad weather (e.g. Rain)
• When meeting the seller at his home ask to use his toilet, this will confirm if it is his address or just an empty house he has pulled onto the driveway of to sell the car.
• Inspect the car in a logical manner noting any defects that can be used later when negotiating price.  Start with the externals, bodywork, wheels, tyres, brakes before moving inside then finally onto engine bay.
• Check the paperwork.  Check the registration document details against the owners name & address (ask to see their drivers licence to confirm), Vehicle registration mark, vehicle identification number.
• Check the service history.  Is the service book stamped up to date and have checks been carried out in a regularly manner in line with mileage and age?  When was the cambelt changed?  When was the air con recharged?
• Look at body panels closely.  Mismatch in colour or over spray onto other panels/trim could indicate the car has been resprayed.  Has it been in a accident?
• If you are happy with what you see take the car for a test drive, minimum 5miles to get the car warmed up.  Try different types of road, low speed, high speed, bends and straights.  Make sure you try all the gears, buttons, lights, pedals and leavers.  Listen for any strange sounds, look for any warning lights on the dash, and smell for any strange odours.
• If the test drive satifys you I would always encourage and independant vehicle inspection from a company like The AA.  This entails one of their mechanics checking the vehicle over to various levels (depending on purchased test) and providing a written report.  Prices start from £135 but it could save you spending hundreds if you buy a car with a fault that could have been picked up.  You should also carry out a data check.  This will tell such things as if there is oustanding finance on the car, if the car is stolen or if it has been written off by an insurance company.
• Your inspection has come back good so now it’s time to negotiate price.  We mentioned earlier looking for defects, now time to use to your advantage.  Every scuffed alloy knock £30 of the asking price.  Every dent £50 off and so on.  Once you and the seller have agreed on a price it is time to settle up.  Here is a handy receipt you should both fill in and keep as a record of the sale.

We have all done, visited a car dealership at the weekend and seen that lovely little two seater sports car you have been drooling over since you were a teenager.  You walk round it, opening the doors, stroking the smooth shiny paintwork and breath in that new car smell.  Then you have a heart attack when you see the on the road (OTR) price!

Buying a new car is the second biggest purchase in your life after a home.  Normally I would not recommend buying new due to depreciation, but to be fair to my future guide on buying used cars this guide must be written.  Now unless you are fortunate enough to have liquid cash lying around you are likely to be buying your new car with some finance.  The question is what type of finance?  This guide aims to explain the various types available and whats best.

Hire Purchase Most dealers will offer this as an option for purchasing a car.  A finance company offering the HP will own the car and the consumer will buy it from them over a set period of time.  The consumer will need to put down a deposit of 10-20% but this means lower monthly repayments over financing the whole car.  The consumer will not own the car until the HP company has been repaid in full, and during this period the car can not be sold.

Personal Contract Purchase The consumer agrees to lease the car for a set period of time, for a set mileage.  For example 3 years at no more than 10,000 miles a year.  If you go over the set mileage the you may end up being charged.  The consumer pays a fixed monthly sum over the lease period. Service, maintenance and repair are included in the monthly payments.  Compared to HP the monthly payments are low, but you will never own the car unless at the end of the term you agree to pay the guaranteed future value.  This is calculated at the start of the term and is fixed.  If the actual value of the car at the end of the term is less than the GFV then as a consumer you loose out, if it’s worth more you can use the difference as the deposit on your next car.  If you don’t want the car at the end of the term you can simply hand the keys back and walk away.

Unsecured Loan A Consumer will borrow money from a bank, building society or finance company based on their income and what they can afford to repay.  The annual percentage rate (APR) and monthly payments are fixed, and the loan is paid back over a fixed term.  As the loan is not secured on the car you own the car from day one and can sell it at any time, but you must pay off the loan within the agreed term.  If you do repay the loan early there may be an early repayment charge.  Some companies offer flexible loans allowing you to take payment breaks without incurring a fee.

Secured Loan A Consumer will borrow money from a bank, building society or finance company and the money will be secured against an item of value i.e. the new car or the consumers house.  The annual percentage rate (APR) and monthly payments are fixed, and the loan is paid back over a fixed term.  Usually the monthly payments for a secured loan are less, you can also have longer repayment terms.  If the loan is secured on your car, you must repay the loan before you are able to sell the car.

Now I explained the 4 most common methods for financing your next new car which is best?  I would certainly rule out PCP if you are planning to hang onto the car.  At the end of the term in most cases you will end up paying anywhere upto 20% more than the market value for the car, as the dealers GFV is usually set in their favour.  So in my opinion PCP is one most expensive finance options.

HP is usually open to most consumers but as such it attracts high APR’s which may not be suitable for your circumstances.  HP is particularly attractive to those consumers who get turned down for secured and unsecured loans.  Once again in the long run HP will cost the consumer more than other finance options.

Unsecured and secured loans from banks or building societies are in my opinion the best way to finance a new car.  Simply apply for the money take it to the dealer and pay the cash.  This makes you a Cash Buyer and as such puts you in a strong negotiating position.  You then simply repay the loan over a fixed term at a fixed rate using monthly payments.  Remember to hunt around for the best rates though, typically 5-8% APR from the high street lenders.  Don’t be enticed by the dealer offering unsecured and secured loans, the rates will be high and you won’t be able to negotiate much on the price.

Unfortunately in recent years it doesn’t matter what you drive or how old you are insurance is always going to be expensive.  The main reason behind the high prices is due to the number of law breakers who don’t insure their cars.  Recent estimates put the number of drivers that drive on UK roads uninsured is approximately 2 million, and they cost the law abiding motorists circa £400 million each year in increased premiums.

The Police have tough powers to deal with these law breakers which include seizing their cars and issuing fixed penalty notices for £200 and 6 penalty points.

Thankfully by following these tips you may be able to reduce your insurance premiums.

• Park your car in a locked garage.
• Take an advance driver course such as those run by the Institute of Advanced Motorists.
• Drive an old small car for example an old Mini or  something unusual like an old Land Rover.
• Limit your mileage to 6000 miles per year.
• Fit a Thatcham category 1 alarm.
• Reduce the number of named drivers on your policy, especially under 25’s.
• Increase your excess to lower premiums, but be aware you will have to pay the higher excess in the event of a claim.

And finally try not to opt for one of these high insurance risk careers – Television personality, professional sports person, casino worker, fashion photographer or a nightclub owner.