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Tips of the trade – what you should know before buying a new car

Tips of the trade – what you should know before buying a new car

The meat on the bone

Everyone knows that everything for sale has a profit margin within the retail price, and what you’ll be expecting next is for us to tell you that every new car carries huge margins meaning potential savings of thousands.

Well, sadly, we’re not, as new cars simply don’t have the margins you might think. So, be realistic when negotiating the price. If you demand £2,000 off, the salesman will have to say no - not because he’s playing hardball, but because he simply can’t do it.

Ask for £250 off though, and you’ll be okay. The dealer isn’t going to let you walk over that.

There’s new, and then there’s new

People still deem ordering a ‘factory build’ as the best thing ever. If the dealer tells you he’s found a car in group stock that’s built, he’s trying to help you get your car faster. Not swindle you out a brand new car.

Unless you absolutely have to have it painted in that shade of yellow the manufacturer put in the brochure for a bet, or if you simply must have the £1000 optional sat-nav that’s made to look like an antique next to any modern £100 offering, give it a miss.

Built cars are a good thing. It’s done and dusted, it exisits, it’s waiting for you and it’s an asset to the manufacturer, and an asset they need to sell. Factories build cars no matter what - there’s no reason to offer you a discount when it's still a steel sheet.

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Timing is everything

If we could show you a monthly or quarterly projection for a dealer’s business, you’d probably make some sort of spluttery, panicked noise. Basically, they have to make a hell of a lot of money and brilliantly, they normally don’t worry about it until the last minute.

Walk into a dealership on the last weekend (or better yet, the last day) of the month and salesmen will fall over backwards to do you a deal. Walk in at the end of a quarter, though, and you’ll be treated like royalty. You will almost certainly be offered all manner of discounts, but please don’t snort in derision when the salesman tells you they only apply if the car is registered that month. He’s not lying.

That car you’ve fallen in love with becomes ‘just’ stock as soon as the calendar hits the 1st, and the salesman won’t be in the mood to do an amazing deal, as he’ll be getting a telling off from his sales manager because the dealership missed their target.

Don’t fall into the gap

The dealer is going to try and sell you extras with your shiny new car, the main two being GAP (Guaranteed Asset Protection) and some kind of paint protection.

GAP can be quite a good thing to have, but maybe not from the dealer, because it’ll be about £400 - far more expensive than it should be.

For those of you who don’t know, GAP is normally a three year policy which, at its core, will return you to the amount you paid for the car in the event of a total loss by making up the ‘GAP’ between the invoice price and whatever the current market value is at the time the car is written off. But you don’t need to pay £400 for it.

A quick internet search will turn up no shortage of reputable companies who can offer you GAP from £150 for three years of cover.

As for paint protection, well, it’s normally around £300. But here’s a secret: washing and waxing your car keeps it clean, not a £300 bag of ‘miracle’ polish that cost the dealership £50.

To trade in, or not to trade in, that’s the question

It’s the simplest thing to overlook in the buying process because it is, after all, the car you’re getting rid of. But while it may be of no further interest to you, it can still hugely useful.

The dealer will offer you what feels like £4.99 for the car you’ve cherished for the last five years, so why not sell it yourself? You may be in a prime position, too, as all you need to do is get more than what the dealer offers.

Try getting the dealer to appraise your car and put a value on it – there’s no obligation to include your car within the deal – then, when you’ve scoffed at their offer, simply advertise it for around 15-20% more than the dealer’s figure and wait.

Your increase on the dealer’s offer may still undercut most other private sales and you’ll also have more money to put towards that shiny new car.