You get in this life what you negotiate, so be prepared to haggle if you want to get the best possible deal. Any dealer will always leave themselves some margin to haggle; if you just pay the sticker price, they’ve made a bit more profit than they expected to and you’re out of pocket more than you need to be. You should be able to chip a bit off the asking price of any new car, although how much of a discount you can secure will depend on the vehicle’s value and what badge it wears.
Do more expensive brands leave less room for negotiation?
Prestige marques tend not to offer many discounts, but with the right timing you should be able to get something out of the dealer – even if it’s just a free tank of fuel.
Pick a reasonable starting point and work backwards
Whatever the asking price of the new car, offer a reasonable amount less – something like £500. It may be that you’re offered more than this anyway, as some volume brands will volunteer a hefty discount just to get you interested.
This should still only be a starting point for negotiations though, and once you’ve pitched in with your £500 discount request, prepare to meet the salesman part-way. You may end up closer to his initial figure than your own, but as long as you knock him down a bit, you’ll have achieved your aim.
Because the margins on new cars can be very slim (many dealers make their money from servicing and parts), you may struggle to get any sort of a discount. If this is the case, ask about a couple of free services, or an accessory or two. A salesman is unlikely to let a sale fall through just because of a £100 extra.
Is it cheaper to buy a new car for less money than a used car?
According to research by What Car?, you could buy a new car for hundreds of pounds less than a one-year-old vehicle, if you do your homework. Many car buyers assume new models are always more expensive thanks to the sharp drop in value when a car is driven off the forecourt, so they think their budget will only ever stretch to a used vehicle.
Think about the finance on offer with new car offers
However, What Car?’s research shows this isn’t always the case. The range of attractive finance deals and low-cost or interest-free loans currently offered by manufacturers and dealers means buying new can sometimes be the cheaper alternative.
The study analysed deposit amounts, monthly finance payments or personal loan repayments, vehicle excise duty, warranty and MOT test costs and depreciation across a range of cars and found that used car ownership cost more in 50% of cases.
For example, a new Skoda Citigo, with its list price of £9490, would cost a buyer £5029 over three and a half years. A one-year old version priced at £8598 would cost £6246 over the same period. That means the new car will save you £1217.
What Car? consumer editor, Emma Butcher, said: “Our research turns the traditional assumption about car buying on its head.
“Don’t take it for granted that a used car is automatically going to offer you the best value. The combination of low interest rates and car maker incentives can make a new car a better buy. Do your homework and you may just surprise yourself.”
Where can I compare new car deals?
What Car?’s research was based on new car buyers using a standard Hire Purchase finance agreement or a Personal Contract Purchase (PCP), in which buyers pay a deposit and then a monthly amount over an agreed period, typically three or four years.
At the end of the period, they have the option to buy the car outright by making a lump sum payment or selling it back to the dealer to buy another new car under a new PCP agreement. Using a PCP to buy a car is not always cheaper; drivers looking for a VW Golf 1.4 TSI 122 SE 5dr can save £2846 over three years if they buy a one-year-old version, once finance package payments, deposits and other costs have been taken into account.
Nonetheless, across the basket of cars studied by What Car?, manufacturer finance arrangements saved an average of £1038 in interest charges when compared with high street loans.