Money & Rights

Choice guide to... Buying and selling a car

Buying a new car doesn’t have to be stressful. In this special Choice guide Teri Harman takes you though the whys and wherefores

Thousands of UK motorists were asked about their experiences of buying a car in a survey by OnePoll for the website FairSquare in January.

The results show a lack of understanding, trust and appeal for drivers when it comes to changing their cars – be they new or used – and especially when it comes to the popular finance products used for these purchases.

Many even said they would rather visit the dentist than buy a new car. Setting out to secure a new set of wheels should be an exciting prospect, not a painful one.

Our guide will help smooth the road ahead with tips on choosing a car, where to buy it, the best ways to pay for it, and the simplest means of selling your old vehicle.

What should you buy?

If you have decided to change your vehicle, you’ll probably have a pretty firm idea about the type of car you want, even if you haven't settled on a specific make and model. Drivers like familiarity, says Auto Trader, the UK’s largest marketplace for new and used cars. In a survey last year it found an overwhelming majority of both new car buyers (76 per cent) and used car buyers (81 per cent) would choose the same type of vehicle again. However, brand loyalty is much less in evidence, with m ore than two-thirds (68 per cent) of used car buyers and 47 per cent of new car buyers changing brands between purchases. Loyalty slowly increases with age – 38 per cent of new car buyers aged 55 to 64 always purchase the same make, compared with 33 per cent of 25 to 34-year olds – but the majority of drivers still like to change brands at all life stages.

If you want to consider alternatives but stick with a similar type of car (hatchback, saloon, SUV, 4x4), car magazines such as Auto Trader or What Car? are a useful starting point. They list cars of similar size and price range together so that you can see immediately what the main alternatives are. They also suggest ‘target’ discounts that may be achievable for each car

Auto Trader’s survey revealed the most important criteria for choosing a manufacturer is trust – we all want a car that is reliable. When I renewed my car insurance last month I was asked if I would like to pay extra for breakdown cover. In turning it down, I realised I am on my third Honda since 2005, downsizing from a 4x4 to a small hatchback, and upsizing again to an SUV, and none has ever broken down or failed to start.

There are various regular surveys aimed at identifying the most reliable (and the safest) cars but they don’t always produce identical results. But the Government’s Money Advice Service website (www.moneyadviceservice.org. uk) has links to league tables to help you pick the safest and most reliable cars

Another consideration might be depreciation. Any new car loses about 20 per cent of its value as soon as it is driven off the showroom forecourt (one of the most compelling arguments for buying a used car) and cars lose between 15 and 20 per cent of their value each year, according to InsuretheGap.com.

Over a five-year period, the online insurer says a Mini Cooper, Mercedes A Class and VW Polo are among the best buys for holding their value, while a Ford Fiesta, Ford Focus and Vauxhall Corsa are among the worst for depreciation.

Ben Wooltorton, chief operating officer at InsuretheGap.com, says: “A number of factors determine a car’s depreciation rate. Some apply to all vehicles based on how they’ve been used, and others are due to the specific characteristics of a particular make and model.

“For example, things like mileage, number of previous owners, service history, general condition and colour are usage factors, whereas reliability, safety, and reputation tend to apply to specific makes or manufacturers and typically don’t change over the course of ownership.

“Put together, these things will all play a part in how much a car is worth when you come to sell, or if it’s written off.”

What insurance group a car is in might also influence your decision, so check this before deciding what to buy, at: (www.uswitch.com/ car-insurance/the-cheapestcars-to-insure).

Rules on road fund tax (Vehicle Excise Duty, VED) changed dramatically last year with only cars which have zero carbon dioxide emissions having a standard VED rate of zero. The AA’s website lists the road fund tax applicable to different cars: (www.theaa. com/driving-advice/drivingcosts/cartax#newrules2017).

For tips on how to save on car insurance, see the March issue of Choice.

Going green

One in 10 UK drivers plans to buy a hybrid model for their next car, according to a report last summer from Aviva. A further two per cent intend to purchase a fully electric vehicle.

Figures from the Society of Motor Manufacturers and Traders show more drivers are opting for hybrids (vehicles powered by petrol or diesel engine and supplemented by an electric motor), with sales up 19 per cent in the first three months of 2018.

However, electric cars are less popular as sales in the first three months of 2018 fell by a third on the same period last year, with motorists seemingly put off by high prices, limited battery range and a lack of roadside or car park charging points. (See case study on page 55.)

Embracing new technology

New cars these days have highly sophisticated systems, including sat-nav and WiFi, cameras and radar sensors to warn of a potential collision, automatic emergency braking (AEB), lane keeping assistance, blind spot warning and speed-limiting devices.

Some cars will even park themselves, and driverless vehicles are being tested around the world.

It can feel as though you need a degree in computer science just to understand how all these so-called Innovative Advanced Driver Assistance Systems (ADAS) work.

What Car? magazine says these systems are expensive to replace and are often housed in vulnerable areas of the car, such as behind bumpers and windscreens.

The knock-on effect is a steep increase in the cost of replacing even these traditionally cheaper parts. According to the Association of British Insurers (ABI), the average cost of a car repair bill has risen by 32 per cent over the past three years to an eye-watering £1678, with technology partly to blame.

Yet, if damaged sensors and other ADAS components are not repaired, they could render on-board safety systems useless and compromise the safety of the driver and passengers.

Steve Huntingford, editor of What Car?, said: “If manufacturers don’t address these rising repair costs, many people could simply decide not to use the latest safety kit for fear that a small mistake could land them with a huge bill. And then that kit will be of no use to anyone.”

To find out more about ADAS, log on to: (www.whatcar.com/ news/car-safety-technology/).

This is just part one of the Choice YMYR Special on buying a car. Keep checking back every day this week for more tips.

Let us know what you think and share your experiences with us and others. Just follow us on Facebook, Twitter, Google+, Instagram and YouTube

Other stories in Money & Rights

Time to buy a new car
Your Questions Answered
10 essential websites for over 50's
Attention: Ask the Experts Pages
Downsize your life
Beat the VAT Hike
When should you start saving for retirement?
Trading with your Savings? 3 Things to Consider
Managing Risk When Investing Savings
What are the similarities between Standard Pensions and SIPPs?
Coping with financial stress as a senior
Investing in an uncertain world
Can Expats Expect The GBP To Recover Against The EUR This Year?
Thriftiness starts at home
YMYR update: Plans to raise Probate fees abandoned
Extra Help at the airport
Is it worth working for longer?
Dealing with debt
Looking for a retirement home
Payouts for Delays
'Olderpreneurs' profit from experience
The building society of Mum and Dad
Latest and Safest car options for over 50s
Setting up a Business for the Over 50s
How new IHT rule can help you
Wronged Pensioners call on PM for a change in the law
The best years of your life
Five online services to save you money before Christmas
Choice guide to Arranging a Funeral
Go contactless- safely
The gentler route to retirement
Take the stress out of your airport experience
Money and Rights News: November
Over 65s most frivolous on holiday
Put the brake on car premiums
UK renters putting lives in jeopardy
Tips to save money in Spring
Nuptials on a budget
Health care in later life
Is it Possible to Be a Successful Ethical Investor?
Holiday hoaxes to dodge
Choice guide to... Buying and selling a car: Where to buy
Choice guide to... Buying and selling a car: Selling
Interest-only mortgages: are you sitting on a timebomb?
Life on the open road
Inherited Family Properties
Supporting students
Is park life right for you?
How to find a lost pension
The value of volunteers
Grandparents access rights
We are all a bit of an animal when it comes to money
Ethical Festive Gift Guide
Christmas Scrooge... or spendthrift?
Giving up plastic
New bank notes for a new type of bank