Yahoo Finance Is now the right time to buy a car, and where will I find a bargain?
As part of the latest round of lockdown easing, car showrooms reopened for business on June 1, and you can now buy a car in person, where before you could only do so online.
But are dealers deserted, or are they bursting with interested buyers? Is now a good time to buy a used car, or should we wait for the economy to shake itself out? What types of car are buyers snapping up? And just how little does one need to spend to get hold of a decent used car? We’ve got the answers to all those questions – and more.
I need to commute by car – what’s the minimum I can get away with spending?
Believe it or not, it’s perfectly feasible to buy a reliable used car these days for £1,000, or even less. Look for well-maintained examples in good condition from manufacturers with a good reputation for reliability, such as Toyota and Honda, and avoid anything that looks too good to be true.
Are car dealers busy at the moment?
Absolutely. Since the reopening dealers have reported record-breaking levels of interest, and high numbers of car sales. Robert Forrester, CEO of Vertu Motors, one of the UK’s largest dealer groups, told us that on Monday, the first day dealerships had reopened in England, the group had sold 451 cars – 100 more than they usually would. “And that’s without full resources, and Scotland and Wales still closed” he added.
What are the most popular cars with customers right now, according to dealers?
Bargain used cars are selling well. However, they aren’t the only cars buyers are interested in. “Cheaper used cars are clearly a lot stronger than other elements,” says Forrester, “so we’ve certainly seen a bit of a shift to there, but the new-car franchises are busy too, and even at Mercedes-Benz we’ve seen very high levels of interest.”
Where are the bargains? Is now a good time to buy the sports car I’ve always promised myself?
All that demand means buyers are snapping up any good deals they can. It’s a seller’s market, in other words. So while the considerable interest in cheaper cars means you might be able to chip a little more money off something more extravagant, there are still plenty of other buyers out there interested in such things.
“Interestingly, while the largest share of interest last week was on cars below £10,000, we saw larger lead volume gains in higher price ranges,” said George Augustaitis, director of automotive industry analytics for classifieds site CarGurus.
Are there more bargains to be had with new or used cars?
Carwow, the new car comparison site, says it saw a 38 per cent increase in test drive enquiries last week, so it isn’t just used cars that are selling.
Having said that, dealers that specialise in both new and used cars are suggesting the lion’s share of enquiries are about used cars. That lower interest in new cars might mean you have a better chance of haggling a deal – even if only slightly.
Is now a good time to haggle?
It depends on the dealer. Some will want to shift the stock they’ve had sitting on their forecourts for months, so may be willing to let it go cheap. Others will see the extraordinary amount of interest they’re getting and want to take advantage by holding out for the best prices possible.
In the next few weeks the surge in demand looks likely to tail off, and you might find you’re more likely to get a better deal once that’s happened.
Should I buy online, and will I get a better deal?
Many dealers are now offering customers the chance to buy online, and it’s proving popular, though there’s no evidence to suggest the deals being offered to online buyers are better than the ones you’ll find in the showroom.
Indeed, the opposite may be true, as an inspection in the flesh gives you a much better chance to spot defects and factor those into your negotiation.
Are dealers offering unaccompanied test drives?
Yes, dealers have started to roll out unaccompanied test-drives, and on the whole they’ve been surprised by just how successful they’ve been.
“It was our first day yesterday of unaccompanied test drives,” said Forrester, “and actually, in one division, everyone who took an unaccompanied test drive bought the car, so the reaction from customers has really been positive.”
Can I buy a camper van, or have they been snapped up by ‘staycationers’?
No, there plenty of campers still available on both the used and new market, though as with used cars, an increase in demand might make it more difficult to get a cheap deal.
Should I get a bank loan or take car finance?
It depends on your circumstances. Finance deals offer buyers lower monthly payments, but one must usually stump up for a deposit and/or a balloon payment at the end of the term to make up the difference; interest rates are usually higher, too.
The monthly repayments on a bank loan are usually higher, but in the long run they normally cost you less, because interest rates are lower, and you end up with a car you can sell on at the end of the term.
One other big advantage of a bank loan is that you own the car throughout – with a finance deal, you don’t own the car until the finance is fully paid off – and that means you aren’t subject to any mileage or damage restrictions.
The do’s and don’ts of buying a used car post-lockdown
DO:
- Bear with salespeople. They’ve just come back off furlough, they’re having to deal with new working conditions and requirements, and they might not be entirely comfortable with the changes. Try to stay polite and friendly, even when you’re haggling.
- Phone first, to check the dealer doesn’t have an appointment system in place to manage the number of people in a showroom. If they do, you’ll be asked to come in at a set time.
- Check cars over fully before starting them up. Many won’t have moved for a long time, which gives you a great chance to look for leaks beneath them. Listen for odd noises on your test-drive, too.
- Use hand sanitisers and washes wherever provided – viewing a car is a touchy-feely process, and even though dealers are supposed to be sanitising cars, you can’t be too sure who’s touched what before you.
DON’T:
- Expect something for nothing. Dealers will be looking to make up for two months of severely reduced business, so they won’t be letting cars leave their forecourts for peanuts.
- Be afraid of cheaper used cars. They can be just as reliable as new ones, and once depreciation is taken into account, they’ll usually cost you far less to own in the long run.
- Over-extend yourself on finance. The monthly repayments might look small, but if economists are right and a recession is on the way, it pays to be prudent – and not to assume business as usual. Consider going for a cheaper car this time, or buying used instead of new.
- Put yourself in harm’s way for the sake of a car. If you visit a dealership and aren’t happy about the measures they’ve put in place, don’t be afraid to walk away – after all, if they’re cutting corners here, there’s a strong chance they will be elsewhere. And if you really don’t want to risk it, most dealers are still offering online sales, some with delivery.
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