Buying a new car in a pandemic may seem like madness, but with the arrival of a new registration plate you could drive off with a bargain
Buying a new car in a pandemic may seem like madness, but with the arrival of a new registration plate tomorrow you could drive off with a bargain.
Car sales fell by almost 40 per cent last month compared to the same time last year and even with the arrival of the ’21’ registration plate and the end of lockdown in sight, people are reluctant to splash out on a new motor.
Buyers are not just being deterred by economic uncertainty. Most are also unable to get behind the wheel for a test drive.
Cashing in: To lure buyers, mouth-watering discounts are on offer as well as free extras
Lockdown rules mean car dealers must keep showrooms shut and only offer a forecourt ‘click-and-collect’ service until mid-April. Sales patter is restricted to walkthrough videos.
To lure buyers, mouth-watering discounts are on offer as well as free extras. With showrooms reopening in six weeks, you could secure a bargain now and pick it up later.
Keith Adams, editor of car buyer’s bible Parkers, says: ‘Currently, you can avoid any uncomfortable sales pitch and take advantage of a buying opportunity.’
Much of the legwork can be done in the comfort of your home thanks to online advice. Parkers offers detailed reviews and tips. But you should also tap into other website resources, such as magazine What Car? and PistonHeads, for reviews and recommendations.
What Car? will even haggle on your behalf – rooting out special offers. It will often beat down the retail price, for example on popular new BMW and Volkswagen models recently by about 20 per cent. It has been able to knock 7 per cent off the retail price of the average new motor, saving about £2,800.
Steve Huntingford, What Car? editor, says: ‘Online sales are driving the market. Talk to a local dealer, then check if we can get you a better price. If so, this same seller should be able to match it. Then book a virtual appointment with the dealer – where they walk you round a car via a live video.’ What Car? research indicates that 45 per cent of new car buyers are comfortable with buying online.
Adams says: ‘If possible, take a vehicle for a spin before parting with money – even if it means waiting until April. But if you are serious about buying now and need a vehicle for essential travel, a dealer might be able to find a way of getting you a test drive.’ It might mean picking up a sanitised car from a forecourt with the keys left inside for you to have a ten-minute drive. The only dealer officially offering 90-minute ‘touchless test drives’ is Tesla, where drivers can pick up and drop off a car without meeting anyone. What Car? says the £11,600 Dacia Sandero currently represents perhaps the best new car bargain.
Others worth checking out, it says, include the Seat Leon (£23,515) as a family car; the hatchback Toyota Yaris (£33,495); the sport utility vehicle Volvo XC40 (£33,545) and the executive BMW 3 Series Sport (£44,635).
For those interested in a hybrid, What Car? suggests the Ford Puma (£22,790) and Skoda Octavia Estate (£31,745). Recommended electric cars include the Volkswagen ID.3 (£32,990) and Tesla Model 3 (£40,490).
Electric vehicles can represent good value with a £3,000 Government discount off the list price, and there is no road tax. An electric car might use £4 of electricity to travel 100 miles, while a petrol vehicle doing 40 miles to the gallon could use £11.50 of fuel for the same trip.
More than 80 per cent of new vehicles are bought on credit – with the most popular option being a personal contract purchase.
After putting down a deposit, you pay a monthly fee for an agreed period, after which you have the option to buy the car outright. The loan covers the amount of money a car is predicted to fall in value for the period of the agreement – typically three years.
So if a £20,000 car is expected to be worth £12,000 in three years, you might pay back £8,000 plus interest. At the end of this term, you pay what the car is estimated to be worth – £12,000 – to keep it. Or you hand back the keys and buy a new car with another loan.
Adams says: ‘As a rule of thumb, an interest-free loan might prove better value than a personal contract purchase, though it can mean handing over a larger deposit. So ask about the option of an interest-free loan and if they could make a deposit contribution.
‘That way, you end up paying less but the dealer does not lose face on lowering the asking price. But don’t stop there. Push to see if they are prepared to throw in free extras – perhaps a better stereo, a sun roof and fancy wheels – to seal the deal.’ Before completing a purchase, consider insurance. Comparison websites such as GoCompare and Confused will provide estimated costs prior to buying.
THIS IS MONEY PODCAST
- What happens next to the property market and house prices?
- The UK has dodged a double-dip recession, so what next?
- Will you confess your investing mistakes?
- Should the GameStop frenzy be stopped to protect investors?
- Should people cash in bitcoin profits or wait for the moon?
- Is this the answer to pension freedom without the pain?
- Are investors right to buy British for better times after lockdown?
- The astonishing year that was 2020… and Christmas taste test
- Is buy now, pay later bad news or savvy spending?
- Would a ‘wealth tax’ work in Britain?
- Is there still time for investors to go bargain hunting?
- Is Britain ready for electric cars? Driving, charging and buying…
- Will the vaccine rally and value investing revival continue?
- How bad will Lockdown 2 be for the UK economy?
- Is this the end of ‘free’ banking or can it survive?
- Has the V-shaped recovery turned into a double-dip?
- Should British investors worry about the US election?
- Is Boris’s 95% mortgage idea a bad move?
- Can we keep our lockdown savings habit?
- Will the Winter Economy Plan save jobs?
- How to make an offer in a seller’s market and avoid overpaying
- Could you fall victim to lockdown fraud? How to fight back
- What’s behind the UK property and US shares lockdown mini-booms?
- Do you know how your pension is invested?
- Online supermarket battle intensifies with M&S and Ocado tie-up
- Is the coronavirus recession better or worse than it looks?
- Can you make a profit and get your money to do some good?
- Are negative interest rates off the table and what next for gold?
- Has the pain in Spain killed off summer holidays this year?
- How to start investing and grow your wealth
- Will the Government tinker with capital gains tax?
- Will a stamp duty cut and Rishi’s rescue plan be enough?
- The self-employed excluded from the coronavirus rescue
- Has lockdown left you with more to save or struggling?
- Are banks triggering a mortgage credit crunch?
- The rise of the lockdown investor – and tips to get started
- Are electric bikes and scooters the future of getting about?
- Are we all going on a summer holiday?
- Could your savings rate turn negative?
- How many state pensions were underpaid? With Steve Webb
- Santander’s 123 chop and how do we pay for the crash?
- Is the Fomo rally the read deal, or will shares dive again?
- Is investing instead of saving worth the risk?
- How bad will recession be – and what will recovery look like?
- Staying social and bright ideas on the ‘good news episode’
- Is furloughing workers the best way to save jobs?
- Will the coronavirus lockdown sink house prices?
- Will helicopter money be the antidote to the coronavirus crisis?
- The Budget, the base rate cut and the stock market crash
- Does Nationwide’s savings lottery show there’s life in the cash Isa?
- Bull markets don’t die of old age, but do they die of coronavirus?
- How do you make comedy pay the bills? Shappi Khorsandi on Making the…
- As NS&I and Marcus cut rates, what’s the point of saving?
- Will the new Chancellor give pension tax relief the chop?
- Are you ready for an electric car? And how to buy at 40% off
- How to fund a life of adventure: Alastair Humphreys
- What does Brexit mean for your finances and rights?
- Are tax returns too taxing – and should you do one?
- Has Santander killed off current accounts with benefits?
- Making the Money Work: Olympic boxer Anthony Ogogo
- Does the watchdog have a plan to finally help savers?
- Making the Money Work: Solo Atlantic rower Kiko Matthews
- The biggest stories of 2019: From Woodford to the wealth gap
- Does the Boris bounce have legs?
- Are the rich really getting richer and poor poorer?
- It could be you! What would you spend a lottery win on?
- Who will win the election battle for the future of our finances?
- How does Labour plan to raise taxes and spend?
- Would you buy an electric car yet – and which are best?
- How much should you try to burglar-proof your home?
- Does loyalty pay? Nationwide, Tesco and where we are loyal
- Will investors benefit from Woodford being axed and what next?
- Does buying a property at auction really get you a good deal?
- Crunch time for Brexit, but should you protect or try to profit?
- How much do you need to save into a pension?
- Is a tough property market the best time to buy a home?
- Should investors and buy-to-letters pay more tax on profits?
- Savings rate cuts, buy-to-let vs right to buy and a bit of Brexit
- Do those born in the 80s really face a state pension age of 75?
- Can consumer power help the planet? Look after your back yard
- Is there a recession looming and what next for interest rates?
- Tricks ruthless scammers use to steal your pension revealed
- Is IR35 a tax trap for the self-employed or making people play fair?
- What Boris as Prime Minister means for your money