When is the best time to buy a second-hand car?
The pandemic and 2022’s semiconductor chip shortage slammed the brakes on new car production, creating a domino effect. With fewer new cars available, people have been holding onto their current vehicles for longer. This has caused a ripple effect throughout the car market, leading to a shortage of used cars as well.
As a result, along with other challenges such as rising energy costs and low consumer confidence, UK car dealers have had less flexibility in pricing their vehicles and offering discounts. For car buyers, it’s important to be aware of the limited choice when purchasing a second-hand car in the current climate. But remember, as a buyer, you don’t have to be limited by your local area.
The good news is that the situation is gradually improving for UK motorists. In 2024, things look a little brighter for those seeking to buy a new or used car, as there is a growing number of both new and used cars in the market.
How much of your salary should you spend on your car?
The cost of the vehicle, along with running costs and potential repairs, can start to add up, so it all comes down to how much you can afford. Can you afford the repairs if something is to go wrong? Working out how much you can afford can be a little complicated, which is why MoneyUnder30 recommends using one of three percentages.
These percentages are based on your total annual salary and are to be used as a guide, but in their simplest terms, you may wish to use the following calculations:
- The Frugal Rule: the total value of your car purchase should be no more than 10% of your annual Income – for the more frugal buyers.
- The Compromise: the total value of your car purchase should be no more than 20% of your annual Income – a good benchmark for something cheap but newer and potentially more reliable.
- The ‘One-Size-Fits-All’ Rule: the total value of your car purchase should be no more than 35% of your annual Income – this covers most bases.
To help you decide which category you fall into, we’ve added more information to our ‘How much of your salary should you spend on a new car?’ blog.
Please note: The percentages used above are general tips based on your yearly income. But remember, everyone’s financial situation is different. Before buying, think about things like how much it’ll cost to run and fix the car. Make sure you can pay for any unexpected expenses, like repairs with either savings or a suitable car warranty. If you require money advice tailored to your circumstances, talk to a reputable financial advisor.
What factors should I consider when buying a new car?
| Factor | Description |
|---|---|
| Budget | Determine how much you can afford to spend based on your current financial commitments. |
| Needs | Consider the size of the vehicle you need, seating capacity, boot space, and whether you need a car for daily commuting, family use, or recreational activities. |
| Fuel Type | If it matters to you, look for cars with good fuel economy to save on fuel expenses, especially if you plan to use the vehicle for long commutes. If you’re environmentally conscious, you might consider electric vehicles (EVs) or hybrids for lower emissions. |
| Reliability | Research the car’s reliability ratings to ensure it’s less likely to require expensive repairs. Ensure you protect yourself against potential repair costs with an extended warranty. |
| Safety Features | Check for some of the latest features that help drivers stay safe: such as Adaptive Cruise Control (adjusts speed to keep a safe distance from the car ahead), Lane Departure Warning alerts if the car drifts out of its lane, Forward Collision Warning (this warns of potential crashes and brakes automatically), Blind Spot Monitoring (detects any vehicles in your blind spots), Rear Cross-Traffic Alert (warns of approaching vehicles while reversing), and Driver Attention Monitoring alerts (for signs of driver drowsiness or distraction). |
| Resale value | Some cars depreciate slower than others. Consider the vehicle’s resale value if you plan to sell it in the future, or if you are planning to keep the vehicle for several years. |
| Technology and Features | Look for touchscreen displays that provide access to navigation, music streaming, and smartphone integration via Apple CarPlay or Android Auto. Voice recognition technology will allow you to control various functions hands-free and Bluetooth connectivity enables seamless communication and audio streaming from mobile devices. |
| Insurance Costs | Research insurance premiums for the models you’re interested in, as insurance premiums can vary significantly. |
| Test Drive | Always test drive the car to check its comfort, handling, braking, and overall performance. |
| Reviews and Ratings | Look up professional and consumer reviews to get an idea of the car’s performance, comfort, and any common issues. |
The car buying process
There are two main options – buying through a dealership or buying privately. Here is some information that might help you decide which route to take.
Buying a car with a dealership
If you visit a dealership you’ll have access to seasoned professionals equipped to give you the latest and greatest advice. They will check the vehicles to ensure the quality of them meets their standard. Here are some of the other things you may want to consider when buying through a dealership.
| Options | Description |
|---|---|
| Wide Selection | Dealerships can offer a wide range of vehicle options, including new, used, and certified pre-owned cars, allowing buyers to choose from various makes, models, and trim levels to suit their preferences and budget. |
| Quality Assurance | Reputable Dealerships conduct thorough inspections and reconditioning processes on their used and certified pre-owned vehicles to ensure they meet quality standards. You might want to check if the dealership conducts vehicle inspection checks. |
| Financing Options | Dealerships can offer various financing options, including loans and leasing arrangements, which can make purchasing a car more accessible and convenient for buyers. You can also arrange your own finance for the vehicle you want to buy, giving you the option to find the best rates. |
| Trade-In Opportunities | Dealerships often accept trade-ins, allowing buyers to offset the cost of their new purchase by trading in their current vehicle. This can streamline the buying process. There are also services available such as We Buy Any Car and Motorway. |
| Extended Warranty and After-Sales Service | Many dealerships offer extended warranties on pre-owned vehicles, providing coverage for certain repairs and maintenance services. You can also buy a used car warranty from a third party provider which may cost less or could provide a higher level of cover. Always check the terms and conditions to make sure you are comparing like for like. The prices of some car components have more than doubled in the past two years, with European brands the most affected. This has led to an increase in the cost of vehicle repairs. Having an extended car warranty in place can help to protect you against unexpected repair costs and help you budget effectively. Be sure to check the details and read the plan book thoroughly before you purchase your warranty to ensure you understand what the plan does and does not cover in terms or repairs and parts. |
Buying a car privately
Buying a car privately can often seem a little daunting, but it needn’t be. There are some straightforward questions you can ask to minimise any potential risk and remember, extended warranty options are available to help protect you.
| Category | Questions to Ask |
|---|---|
| Vehicle Condition | 1. Can you describe the overall condition of the car? 2. Are there any known mechanical issues or past repairs? Has the bodywork and paintwork been repaired? Are there any scratches / any damage underneath the vehicle? 3. Can I see the vehicle’s service history and MOT records? 4. Has the car been involved in any accidents? 5. How many miles has the vehicle done? 6. How old is the car? |
| Price Negotiation | 1. How did you determine the asking price for the car? 2. Are there any faults or issues that could affect the price? 3. Is the price negotiable, and are you open to offers? 4. Have you had other offers, and how long has the car been for sale? |
| Documentation | 1. Do you have proof of ownership and is the V5C document available? 2. Are there any outstanding finance agreements or loans on the car? |
| Test Drive and Inspection | 1. May I take the car for a test drive? 2. Can I have the car inspected by an independent mechanic? 3. Can we review the car’s condition together and discuss any issues? |
| MOT and Service History | 1. Is there a record of the MOT and service history? 2. You can check the vehicle’s MOT history online through the government website. |
Financing your used car
Car finance houses, also known as finance companies or lenders, are financial institutions that specialise in providing loans and financing options for purchasing vehicles.
You may wish to look at some of the following finance houses, allowing for more flexibility when purchasing your next car:
Car Maintenance: The Facts
Let’s face it. Cars are complex machines and even though you may have your car serviced regularly things still do go wrong. At some point or another, your car may need a mechanical or electrical repair.
2024 is looking to be expensive for car repairs, with the cost of repairs jumping 32% in the last quarter of 2023. As such, there are concerns that more motorists will put off essential vehicle maintenance and servicing to save money – with the dangerous consequence of unsafe or unreliable cars on the road. Maintaining your vehicle properly is the best way to keep repair costs down.
Protect your investment with an extended warranty you can be confident in
The good news is, there’s also the option to protect yourself with an extended warranty. Speak to Warrantywise today to find out how much a warranty could cost on your car.
Not bought your car yet?
We can set up a quote for you based on the type of vehicle you are looking for and get in touch once you are ready. Start your car warranty quote or call 0800 001 4990.
Thinking of keeping your existing vehicle for a little longer?
You don’t need to buy a new car to get an extended warranty. Most manufacturer warranties last 3 years. If your car is over 3 years old you might want to check that it’s still in place and if not, consider extended car warranty cover for added peace of mind.
Disclaimer:
Warrantywise does not provide financial advice. The information offered by Warrantywise is intended for general informational purposes only and should not be regarded as financial guidance. It is advisable to seek advice from a qualified financial advisor for personalised guidance regarding your individual circumstances. Warrantywise is not accountable for any decisions made based on the information provided and disclaims any liability for actions taken in reliance on such information.
Sources
Money Under 30. Accessed on 8th Feb 2024. How much car can you afford? Money Under 30. Retrieved from https://www.moneyunder30.com/how-much-car-can-you-afford/
Car Dealer Magazine. Accessed on 8th Feb 2024. Revealed: How Brexit and the COVID hangover are affecting the price of spare parts. Car Dealer Magazine. Retrieved from https://cardealermagazine.co.uk/publish/revealed-how-brexit-and-the-covid-hangover-are-affecting-the-price-of-spare-parts/292517
This is Money. Accessed on 8th Feb 2024. I’m a motoring expert… and here’s why the cost of repairing your car could soar in 2024. This is Money. Retrieved from https://www.thisismoney.co.uk/money/cars/article-12956891/Im-motoring-expert-heres-cost-repairing-car-soar-2024.html
References used in Best Months to Buy a Used car table:
https://www.autoexpress.co.uk/car-news/108176/when-is-the-best-time-to-buy-a-car https://www.carsvansandbikes.com/buying-guides/the-best-time-to
MotoTrader. Accessed on21st February 2024. Cost of living crisis and stock shortages: Biggest dealer challenges. Retrieved from https://www.motortrader.com/motor-trader-news/automotive-news/cost-living-crisis-stock-shortages-biggest-dealer-challenges-21-08-2023
Cox Automotive. (n.d.). Accessed on 21st February 2024. Cox Automotive reiterates 2024 market forecasts and predicts a scramble for stability. Retrieved from https://www.coxautoinc.eu/knowledge-centre/content-hub/cox-automotive-reiterates-2024-market-forecasts-and-predicts-a-scramble-for-stability/