Top money-saving tips for buying a new car

For most of us buying, leasing or PCPing a new car the second-most expensive purchase we’re likely to make, and it should be an exciting one, but equally we need to feel confident we’ve made the right decision, not one influenced by showroom glitz or smooth-talking sales patter.

The last thing you want to experience as you drive away your shiny new set of wheels is a niggling suspicion that you’ve been fleeced. So who better to advise you on how to get a great deal on your next new car than sales executives from dealerships? Speaking to us incognito, they reveal their top tips to save you money.

Don’t forget to check out our Cars for Sale section for the latest deals on new and used cars. And when you come to sell your current car, make sure you get a free car valuation with us to ensure you get the right price.

Should buy pay cash, go for PCP or PCH?

There’s no one-size-fits-all answer here but PCPs are incredibly popular because of their lower monthly payments; you’re only financing a proportion of the car’s list price. 'We’d also recommend striking a balance of paying as small a deposit as you can while keeping the monthly payments manageable,' suggests one sales executive.

Hire Purchase agreements tend to be the preserve of people who feel the need to own the car at the end of the agreement. 'Spending £20,000 on something worth less than half of that – and is still depreciating – after three or four years doesn’t make as much sense as a PCP, particularly if you're going to trade it in anyway.'

People looking to make a cash purchase still have the issue of owning something that perpetually drops in value but they may be able to secure a discount if they’re looking at a car that’s available on 0% finance. Another sales executive confirmed that, 'dealerships often have to part-fund those low interest rate offers, so we may have some profit margin to play with for cash buyers. Even so, we’d still encourage cash buyers to look seriously at PCPs and spend less money overall, freeing up their capital for other purchases.'

If you’re considering buying your new car on finance, make sure you visit our finance section for a quote - we work with over 21 lenders to give our customers access to over 100 different lending options.

>> Read more: Car PCP vs getting a loan

What about GAP insurance?

This is to cover the difference between the actual value of the car and the amount which is still owed on finance - is not a legal necessity but it’s a very sensible policy to take out. 'You can shop around but manufacturer-sourced policies tend to be the most comprehensive, often coming with a contribution to the premium,' says one salesperson.

>> Read more: What is GAP insurance?

What kind of discount should you aim for?

A. The rise of PCPs means gone are the days when customers would come in and ask for £1,000 off or a 5% discount. Now, customers tend to think much more in terms of how much they want to spend per month.

One sales executive informs us that, 'it’s important that customers are honest with us – few things are more frustrating than calculating a finance package based on the customer's budget only for them to say "actually, I was hoping it could be less than that" or "another dealer says they could do it for this."

'We'll do our best to secure a deal with a customer but it could well be we sell identical cars at £200 per month to one and £180 to the next. Work out exactly what you can afford each month and deduct about 10% from that figure. If you subtract more than that it may scupper your chances of a deal on the car you really want and we're likely to feel that you’re wasting our time.'

Can you get discounts on options?

Negotiating with a dealer for the best deal

All options have to be paid for by the dealership but at a much lower rate than the retail price. Even so it’s highly unlikely you’ll get them for free but a healthy discount is possible.

'That £1,000 leather interior option could be yours for half that figure, while your sat-nav upgrade may appear to be free because you’ve paid full price for a £1,250 safety pack. Metallic paint is usually the easiest option to obtain at low cost,' explains one salesperson.

Buying from stock vs ordering from the factory

Saving money by buying from stock is a possibility, but it largely depends on whether the sales executive is close to their monthly target already. If they aren’t, it’s probable they’ll endeavour to sell you a car that exists in stock at a substantial discount because they’ll be able to complete the deal sooner. 'The quicker you’re driving off in your car, the sooner they'll reach their target and be in line for a bonus payment,' confirms one sales manager.

If you order one from the factory they may not be able to complete the deal until the car’s arrived at the showroom, which could be several weeks later. You’re in charge here though: if none of the cars in stock match your requirements then order one instead of compromising.

When's the best time to buy?

There isn't really a best time. That comes down to whether sales executives or the showroom as a whole are meeting their monthly, quarterly or half-yearly targets. If a dealership requires one sale to guarantee its tally for a three-month period and you just happen to be in the showroom at that moment, you could get a great deal – but they won’t advertise the fact.

Similarly, sales executives may offer a better deal at the end of their monthly period, so you may hang on until towards the end of the month. It’s a game of chance, though – they may have had a great month already and have no need to eat into their profit margin later on.

One sales executive advises that, 'in all honesty you’re better off buying when you’re ready rather than trying to second-guess how well the dealership is performing. That said, if you happen to find an unsold convertible in mid-winter a bargain could be had.'

>> Read more: Buying a car at Easter

Preparing your trade-in

Don’t waste money getting your car valeted. 'If we take it as a part-exchange we’ll budget for doing that anyway. All we ask is that if there’s any damage to the bodywork, wheels or interior that it’s clearly visible when we appraise the car,' offers one of the salespeople.

Having all of the car’s service history readily available, with the service book showing stamps at the correct intervals, will speed up the purchasing process and is likely to increase the trade-in's value.

Selling privately vs trading-in

It's usually better to sell privately as you'll get more for your car, and the extra cash gives you buying power. But most people don’t want the hassle of people phoning up or coming around, eventually bartering them down to something close to the trade-in value anyway. Plus, you could still be trying to sell the car yet already making payments on the new one you’ve bought.

>> Click here for a Parkers free car valuation

The sales manager reinforces this view, 'yes, we will endeavour to make a profit on selling your old car on to a new customer but we operate a business, so that’s natural. We'll also spend money on tidying up cosmetic work, servicing it and adding a warranty, all of which are costs we need to recoup.'

How to get the best deal

'It’s quite simple: be pleasant, be honest and set time aside,' is the common consensus among our sales executives. The easier it is for a sales executive to build a rapport with you, the more they’re going to try to secure you a deal that will get you into the car you’re happy to drive.

Be straightforward about how much you want to spend and whether you’ve already received some quotes. 'If we can beat it, we will – but if we can’t then you’ve still had a great offer elsewhere,' explains the sales manager.

'Don’t wander in to the showroom 10 minutes before closing. Buying a new car can be a two- to three-hour process to do properly. When the process is rushed mistakes can be made.'

Need more help looking for your next car? The articles below may help:

>> Best cars - expert help on choosing the right car for you

>> Best electric cars - everything you need to know about EVs

>> Car warranties: all you need to know