Do your homework and you may be able to afford a better car than you think

Despite the bad weather we have recently had it looks like business is brisk although, on the downside, dealers are telling us that margins are under pressure. It is safe to assume that this is going to be a fairly important year and dealers are keen to ensure that q1 is set up to give them the best start possible. The competition with the new car market is also likely to have an effect on late plate cars as manufacturers look to continue subsidising sales by offers such as free insurance, deposit contributions and by pre-registering cars at a large discount to the dealer network.

All this is great for the consumer and, of course, for dealers who gear their business around selling new cars. However it will also mean that many dealers who represent a brand will need to dramatically alter their thinking in terms of what age of car they stock.

I was minded of this recently when talking to a friend who was due to change his car and asked me my advice. He was at the end of a PCP deal and wanted to simply upgrade on his current car and if possible keep similar sized payments. In line with how we all want subtle extras in today’s world and although the extras he wanted weren’t major (alloy wheels, dab radio and iPod connection) it meant going up in the model range and consequently another couple of grand on the list price.

I helped him look about for a nearly new example and got a couple of quotes on a 1 year old model with 12k on the clock this, with his equity and deposit contribution, would cost him £195 per month similar to his existing payment and he asked me to push the button and get the deal rolling. However I decided, just for peace of mind, to talk to a dealer about a deal on a new car and what offers were about. It ended up that with free insurance, low rate finance and with a discount of around 6% I could get the exact model but brand new on a 3 year PCP for about £10 per month more which, with all the other benefits of a service plan and him being the first owner, proved to be far too attractive a proposition to turn down.

In the same way we all seek out cheap insurance and invest a lot of time doing so, with the massive increase in drivers funding car purchases in this way it is vital that buyers consider all their options before making the big decision because it might just be that you can afford a better car than you think if you are financing it in this modern way.