After buying a house, your car is likely to be the most expensive item you own. It’s a serious investment and will make up a significant proportion of your annual income. However, are you paying more than you should? There are several hidden costs of buying a car – either used or new – and all of them could be negotiable. So, the next time you head to your car dealer with the aim of driving away in a fresh set of wheels, take note. These hidden costs could mean you are paying more than you should.
The leasing option
When you lease a car, you will always be paying more for it. Sure, you might get to drive a smarter set of wheels, but is it worth it? It’s also worth considering how your dealer feels about your lease. When you come to the end of your terms, what do you think they want you to do? That’s right – get another lease. And, if you don’t want to end up with another lease car, they will make sure you end up buying that vehicle outright.
Another thing to point out is that leases tend to be non-negotiable. Buy a car, and you can haggle the price down by a significant amount. You have no chance with a lease, other than requesting a higher mileage limit or the length of the lease itself. You are always better off buying a car outright, right from the very beginning.
The finance option
If you have ever bought a car on finance before, how much attention did you really give the interest? The truth is that many people who buy new cars on a finance deal end up paying anything up to an extra 50% on top. And, given that depreciation – more on which later – kicks in, you can see how this leads to overpaying in a big way.
Again, it’s always best to pay upfront for your car rather than go on a finance deal. It’s less of an issue with used cars, of course, but you should pay close attention when buying new.
Some car dealers will charge you what they call an ‘admin fee.’ It could be anything from £50-150, which they state could be for anything from final car checks to basic office paperwork prep. You can challenge these fees, of course, but be aware that you might miss out on the car of your dreams if they don’t feel like playing ball.
The main thing to remember is that all car dealers will want to make a deal. They have spent the last half a day trying to woo you, after all. There is a good chance they will do everything in their power to ensure you don’t slip through their fingers. Use this to your advantage by challenging anything looking like an admin fee. It’s also worth pointing out that these admin fees can also appear when you sell your car to a dealer. A certain big brand car buyer – who will remain nameless – often use this tactic to avoid paying your car’s true value.
Believe it or not, where you car dealer is based will also affect the price of your vehicle. You might find that a car will sell for a high price in the southeast, for example. But the exact same vehicle will go for 20-25% less in the north-east. The local economy can have a significant say in the price of any used car. So, if you are prepared to travel a little further afield, there is every chance you could snag a bargain.
Several location-based factors can increase the price of a car. As Hilton Garage point out, larger overheads mean a higher price for customers. Car lot rents, the number of employees, shipping costs – they can all have an impact. It’s worth your while taking a look around and finding a dealer away from the expensive locations and finding cheaper options. It can, in some cases, save you a fortune.
There have been some cases of dealers giving a car an upgrade, and then adding a fee to the price of the vehicle. Again, it’s essential that you check your bill before handing over any money.
For example, your dealer might charge you £400 for tinting the windows in the car – but how can you be sure they weren’t tinted in the first place? So, always go through your bill with a fine tooth comb and ensure that everything you pay for is legitimate. And, if you don’t like the upgrades, don’t be afraid to ask for the regular option! The dealer will tend to be willing to remove the extra charges rather than waste their time and money changing things back again.
Another needless service offered by certain dealers is upholstery protection. Sure, it makes sense – you want your car to last as long as possible. But it also can cost a lot more than it is worth.
Some dealers of ill repute have been known to charge anything up to £200 for doing this. However, a can of fabric protection spray from your local B&Q will often give you the same result. Plus, most cars have fabric protection built into them these days. It’s the same principle for paint protection on the exterior of your vehicle. There is no product out there that will give you a much better result than a single tub of £10 car wax. Why pay hundreds for it when you could do it yourself?
Finally, if you are flash enough to buy a car through a dealer abroad, make sure you are reading the small print. Obviously, the costs of shipping in can be great – it’s not cheap bringing a huge hunk of metal over the sea. But some dealers will add on a little extra – and in some cases, this can add up to quite a sum.
It’s worth looking into making your own arrangements. It can take a while, but in many cases, it will be worth your time. Always check the small print, folks!