How to buy a new or used car

If you see a car in an online classified advert or at a dealer with delivery mileage, it is most likely a ‘pre-registered’ vehicle. This is a car that the dealer has registered to take advantage of a bonus payment from the manufacturer for meeting a sales target. A dealer might have access to several similar vehicles for sale, or they might end up at a car supermarket in greater numbers. In both cases you would expect to pay much lower than the official on-the-road price for that particular car.

It’s new in the sense that it looks, feels and smells that way. Delivery mileage could be up to a couple of hundred on the odometer, but could just be single figures. But the V5C will show the dealer as the first owner, or registered keeper, of the car. You’ll pay substantially less than if you were ordering it new (anything up to 30 per cent lower), but you won’t be able to sell it on advertising it as a ‘one careful owner’ car.

If you adjust the search terms for your preferred car to find used or ‘nearly new’ cars for the current or previous year, and adjust the maximum mileage to 100 or some other low amount, they should appear fairly easily. You might also find them on manufacturer websites when searching to configure a vehicle. For example, when looking at the BMW website recently we saw a tab for ‘cars for immediate delivery’. This included a selection of pre-registered models at BMW dealers, including a desirable 420d Gran Coupe M Sport auto for £5000 lower than the official on-the-road price

You might not be able to find your preferred choice of engine, equipment grade, colour or options, although you might be lucky. But you should be able to find a pre-registered model that gets very close to the specification you want among the most popular cars for sale, and it will almost feel as good as configuring the car yourself. Especially when you think of the money you will have saved compared with specifying your own car.

Do your homework before you start your enquiries. A car dealer isn’t necessarily best placed to advise you on the best course of action, but if you check out the manufacturer websites you should be able to see all of the deals or incentives for a new model. They could be offering cash incentives when buying outright, or deposit contributions on PCPs. A pre-registered car should be substantially lower than the best price you could get for buying an equivalent model when buying new.

Try to find out if a particular model you’re interested in is due to be replaced or updated. Searching online for cars that appeared at recent motor shows, or lists of new models due to be launched in the near future should give you some clues.

You might prefer to wait for the new model, but as a car is being replaced, the manufacturer deploys a ‘run-out strategy’ for the current model, where they give the dealer a more generous margin to absorb a customer discount, and by the same token an easier car for the dealer to self-register. You might find more examples of pre-registered models at dealers when a car is due to be replaced.

Some cars are self-registered by dealers to be demonstrators. These might have higher mileage than a typical pre-registered car – although still only a few hundred. You would expect to pay a slightly lower price for an ex-demonstrator, and it should be inspected extra closely for damage. It could have had people behind the wheel not used to its dimensions, and it isn’t unheard of for minor bumps and scrapes on test drives. If any damage is spotted, it should be superficial, but also the dealer should put it right before the sale.

If a business – in this case a dealer – is the first registered keeper of the vehicle, it will have paid the VAT on the car’s on-the-road price. But it would also be able to reclaim it. As far as private buyers are concerned, the price you pay is the price advertised. The dealer will have built in the VAT payable into the advertised price, which is substantially lower than the official on-the-road price of the new version of the car. If they try to add VAT to the advertised price, walk away.

If the car was involved in an accident and written off during the first year of ownership, if it was new, the insurance company would usually offer a like-for-like replacement. As the second owner of a pre-registered car, the insurance company will probably replace with a year-old equivalent if written off during your first 12 months with the car.

Manufacturer warranties begin at the date of registration. Not so much of a worry if the pre-registered car is only a few weeks old, but some can be left in a holding area for months before being advertised for sale. You get the benefit of paying much less for the car than buying new, but you could be losing a substantial chunk of the time limit on the warranty, which in most cases lasts for three years from the date of registration, although a few manufacturers have warranties of five or seven years.

Obvious, we know, but it’s really important to establish a set of imperatives before you hit the showrooms, with their dizzying combination of special offers, smooth salesmen and machine-vended frothy Flavia. How many seats do you need? What sort of luggage space? Is fuel economy more important than performance?

Are there certain conveniences you can’t live without, like an iPod connection or air conditioning? Will it one day become the kids’ runabout, or do you only plan to keep it for a couple of years? Think about all these things before you begin. 

The cost of motoring can be astronomical, so it’s important not just to look at the price of the car itself, but also how much it will cost to run over the medium and long terms.

If you’re taking on a monthly payment (as do most buyers), you’ll need to add to that the fuel, car tax, insurance and any potential repairs, should you decide to keep it beyond its manufacturer warranty. This isn’t too complicated, but requires thought and planning – and the willingness to stick to your budget. 

This is a key consideration. Do you plan to buy your car outright and run it into the ground, so to speak, or do you prefer the warranty-backed assurance of a new car every three-or-so years?

Each has its pros and cons. Changing cars regularly means you can keep your costs in control and are less likely to encounter repair issues, while owning a car outright means, of course, no monthly payments.

There are a few ways to buy a car, aside from counting out £50 notes in the dealership, and it’s likely that you’ll end up paying for your car monthly. It rarely makes sense to buy a new car outright in cash.

So, do your research and work out the difference between HP, PCP and leasing. It's also worth comparing APR, as some high street banks will car focused loans, with lower interest rates, which will save you money in the long run.

Car dealers often don’t like cash buyers because the profit margin on most cars is surprisingly tight – dealers are usually making hundreds rather than thousands, especially with smaller cars. Therefore, finance deals offer a lucrative slice of additional income, as well as making repeat custom more likely.

Being a cash buyer is great if you’re planning on keeping the car long term, but if you think you’ll regularly change your car, it might be worth holding onto your cash and taking out a monthly payment scheme. 

It’s often difficult to stay emotionally detached from the process of buying a car – most of us have decided what we want long before the test drive and the nitty gritty of finance. But, if you can, remain open-minded until the bitter end.

Playing one car dealer off against another is the oldest and most effective trick in the book. Never be fooled by a typical “you must buy it within the next three minutes or the other couple will get this deal” shtick. A deal will always be available. 

Another obvious one, but a proper test drive is extremely important and you shouldn’t be embarrassed about giving any car you’re thinking about a good going over.

Think about everything you’ll be using it for, have a proper poke around all the switches, door, dials and compartments. And be as cynical as you can. Drive in familiar surroundings so you can focus on the car itself and try to test it doing things it’ll be doing every day – take the kids with you, for example.

Having a car to part exchange adds a layer of complication to the buying process and while it’s important to research and know the part-exchange value of your car, you should always think about its valuation in the context of the deal.

So, if your car’s worth roughly £5000 and the Ford Focus you’re after retails at £15,000, you should be looking to pay as far below the £10,000 difference as you can. One dealer may offset a high valuation with a smaller discount, so try to think in terms of what you’ll ultimately be paying.  

This isn’t a simple art, but it’s important to buy a car that’s a popular trim and has the right options on it, in order to keep its resale value high and, it follows, the monthly cost lower.

You wouldn’t buy a compact executive type car on plastic wheel trims, for example, and with smaller cars, the five-door versions can actually end up costing less per month than their cheaper three-door counterparts because they’re more popular as used buys. Ask the dealer which options and colours are popular and he’ll advise you with perspicacity. Probably. 

Once you’ve decided on the car you want and a price you’re happy with, make sure you know exactly what you’re getting. Sounds simple, but double check the specification, warranty, delivery date, and extras you expect like floor mats and enough fuel to get you home. You should get the V5C logbook the day you pick up the car, which is the legal document specifying that you are the registered keeper. 

When you first see the car, what do your instincts tell you? Do you get a funny feeling in the pit of your stomach?

Trust these feelings, because they are your natural defence mechanisms at work. All too often we ignore our instincts and talk ourselves into making a bad decision.

That's what salesmanship is all about: getting you to think nice thoughts about what you're going to do with the car or how easy it will be to pay for it, and to put out of your head the obvious fact that the car is a heap of junk.

Beware the car dealer who pre-qualifies your financial status over the phone so that, when you arrive at the car lot, the finance is set up and all you have to do is choose a car. By that time, you are pre-sold on buying a car from that dealer come what may and, when you leave home, you leave your brain and your instincts behind.

Assuming - and only assuming - you have a good feeling about the car, you can check it out yourself or have it independently inspected. The downside of an independent inspection, of course, is that it may take some time to get an appointment, the vendor may sell the car in the meantime, and you'll still have to fork out the inspection fee.

So many things affect used car values and you’re unlikely to find two identical models for exactly the same price. One of the best ways to get an idea of what you should pay is to search classified adverts for the type of car you want. Check out our Cars For Sale. Even if you’re not ready to buy the car, it’s a good way of working out how much it will realistically cost.

You can also use our Honest Used Car Prices which will give you an idea of how much to pay for a particular model.

This isn’t usually a problem if you’re buying from a dealer (though some people buy and sell cars professionally from home) but under no circumstances should you buy a used car from anywhere other than a private seller’s home address - otherwise, there’s no guarantee it belongs to them.

Initially viewing the car somewhere else is okay but when you’re handing over cash, make sure the address on the V5C registration document tallies with the vendor’s. If the seller asks to meet you elsewhere to close the deal then it’s probably best to walk away.

A professional history check can tell you whether a used car has a clean slate or a sketchy past. A basic history check from MyCarCheck.com costs just £1.99 and will tell you if the vehicle has been stolen or written off, while the most expensive one costs £19.95 and adds more detail. An HPI check will also tell if you if there is a loan or any outstanding finance against the car. Remember, it's illegal for someone to sell a car that has outstanding finance on it.

You can find the basics of a used car’s past without paying for a check, though. Examine the car’s service history (if it has one) and check its identity with the DVLA, its MoT history and whether or not it has been recalled.

Have a good look at the exterior and keep an eye out for uneven panel gaps, corrosion, scratches or dents. Check the amount of tread left on the tyres, as worn rubber can mean they’re fitted incorrectly or be a sign of a hard life.

Check the oil, coolant and brake fluid levels (and clutch fluid if it’s hydraulic) and look for leaks in the engine bay and below the car. Make sure the electrics work too – lights, radio, windows, wipers and anything else you can turn on or off.

Always do this in the daytime when visibility is better. If you're not sure then get a professional to look at the car for you. Any legitimate private seller will have no problem with a buyer having the car inspected by a professional. Prices vary (depending on the car and location) but usually start at around £150 and you can ensure - as far as possible - that the car you’re buying is sound. Organisations like the RAC, AA or Dekra all offer vehicle inspections.

A test drive is always worthwhile. Dealers should have demonstrators’ insurance that covers you for this but you should still ask about it beforehand. For private sales, contact your insurance company to see if you’re legally covered for a test drive.

If it’s safe to do so, loosen your grip on the wheel slightly to see if the car veers to one side. Listen for knocks, squeaks, rattles or any other odd sounds and generally keep an eye out for anything unusual. If possible, pick a route that’s similar to your typical daily journey.

If the car is manual, where does the clutch take up? If near the top of the pedal travel, there is likely to be less than 10,000 miles of life left in the clutch. If you can get it to slip, reckon on less than 2,000 miles.

Does the car accelerate smoothly? Do the brakes stop the car straight and true? If you feel juddering, the discs may be warped. If retardation is slow, the discs, pads, drums, linings may be worn or grooved. Do the brakes lock up front or back during an emergency stop? If so, the rear brake compensator may be failing.

Finally, check all the electrics: wipers, sunroof, windows, everything. If the car has a trip computer, get the owner to run through its functions. But, obviously, if the car is cheap, you don't worry about a non-functioning trip computer.

Dealers and most private sellers typically advertise cars at a slightly higher value than they expect to achieve. The simplest way to check out their bottom line is to ask, 'I know the advertised price, but what's the lowest you're prepared to take for the car?' They may smile sheepishly and tell you straight away, or getting to their bottom line might be like pulling teeth.

Much will depend on circumstances, such as the urgency of the sale, how long the car has been on the market, and/or how few people have come to see it. If the seller has already bought a replacement car, they may need to sell the older one urgently. Just chatting to them may elicit little hints that tell you the true circumstances.

The best way to pay is with a credit card, as you’ll be protected under the Consumer Credit Act. This is rarely, if ever, possible with private sellers but however you pay and whoever you buy from, make sure you get a full receipt that includes a signature, date, name, address and the details and cost of the car.

There are plenty of ways to make payment and a faster payment bank transfer (done online or over the phone) is among the best, as the money can be moved in less than two hours. Cash is also instant but it’s safest to do the handover in a bank.

Don’t hand over the cash until you’re satisfied you have all the relevant paperwork and extras. The V5C or logbook is the most important document because it identifies the owner of the car. You'll need proof of an MoT plus the service history and vehicle handbook are well worth having, too.

Most cars should have spare keys so make sure you pocket those, along with the adaptor to remove locking wheel nuts if they’re fitted. Also look for the spare wheel and tools to change it or the tyre repair kit depending on which the car has.

Check for major service intervals. Volkswagen's for example, need a cambelt every four years (post-2009), so check that you're not being sold a car that's going to cost another £750 in the near future.

If the seller has a blue V5C with a serial number between BG8229501 to BG9999030 and BI2305501 to BI2800000, do not go ahead with the sale. These were a batch of V5Cs stolen in 2009.

Cash at the site of the sale is often the quickest way to pay for a car sold privately, depending on the amount involved. For obvious reasons it’s not wise to declare to a seller that you’ve not met that you’ll be turning up to buy a car you’ve not seen with an envelope full of notes. We'd suggest a transfer at the bank is a safer option.

Never buy a car, or place a deposit on a car, or give any money to any person or organisation pertaining to a car, without having seen the thing in real life first. With a dealership, often a finance payment is the best way to go, because it not only means the dealership is liable if things go awry with the car, but the finance company is too. 

Used cars have not been sold with valid road tax since the demise of the tax disc in 2014, so you’ll need to buy tax before you drive the car anywhere.

You will also need to make sure it has a current MoT and most importantly, get it insured. This can all be done online or over the phone, but it's your responsibility as the new registered keeper to get it sorted before you jump in a drive off.

And remember, there is no purchase protection if you buy a car on eBay and pay via PayPal, so it’s at the seller’s discretion as to whether to sort any subsequent problems.

Make sure the auction site you plan to attend is actually having a public sale. Some auctions are closed sales for dealers and traders, while others can be single make sales for franchised dealers. Don’t waste a journey by going on the wrong day. You'd be surprised at how common this is...

The majority of car auctions will have vehicle listings available to view online. It’s possible to find out plenty of general information on the types of vehicle you’re interested in, including what problems to look out for in our reviews. But for specific information on the cars at the auction, you’re relying on what the seller has told the auction company and anything the auction company is reasonably able to do to validate it.

It probably isn’t a good idea to buy a car at the first auction you attend. If you have time, try to attend a few beforehand to get a feeling for how they work. Unlike buying from a dealer, there’s less you can do to get your money back if you decide you’ve made a mistake. And you may regret that mid-life crisis purchase when you get home...

Each car should have printed information identifying the make and model, as well as including important declarations. There might also be a condition report from the auction house inspection. But it is the prospective buyer’s responsibility alone to check the exterior and interior.

If you have a limited understanding of how engines work, it’s a good idea to bring someone with you who knows them inside out. Imperfect cars are auctioned all the time, but the sale price reflects the condition of the vehicle. Although the auctioneer will refer to the car’s service history, it doesn’t mean the correct intervals have been met, nor the manufacturer’s recommended work has been carried out. And remember, there will be no opportunity to test drive the car before the sale.

Most auction companies will guarantee the seller’s legal ownership of the car. If evidence of outstanding credit, a stolen vehicle or an undeclared insurance write off comes to light after the sale, you will normally be refunded. But there's nothing stopping you using your phone to do a vehicle check - they start at just a couple of quid.

Do listen carefully to the description of the car read out by the auctioneer. It’s this description that is legally binding and takes precedence over online sales listings or printed buying guides. If the auctioneer says there are ‘no major mechanical faults’, it includes the engine, gearbox, clutch, brakes and steering. Buyers have only one hour after the hammer has dropped to refute any of these claims. Any faults should be specified and read out by the auctioneer before bidding starts. Remember, everything is sold as seen.

Most auction companies will guarantee the seller’s legal ownership of the car. If evidence of outstanding credit, a stolen vehicle or an undeclared insurance write off comes to light after the sale, you will normally be refunded. But there's nothing stopping you using your phone to do a vehicle check - they start at just a couple of quid.

If a car is sold with a 'warranted mileage', the seller has validated it as correct. If, after the sale, the buyer believes the mileage is incorrect, they should report it to the auction company as soon as possible. There will normally a time limit of around five days for accepting these claims.

Auctions will normally charge a fee for handling both cash and credit cards, and there are also buyers fees on top. These vary and tend to be a higher proportion of a car’s sale price for low-price cars with less for those that sell at high prices. So make sure you have factored this in when buying the car. Cars sold at auction have VAT included in the hammer price.

If you intend to drive the car away on the day, you need to ensure the vehicle is taxed, MOT’d and insured for you to drive it. Alternatively, auction companies can deliver vehicles to UK addresses after the auction for a fee. You can’t legally take delivery of the vehicle until you pay in full. If you can’t pay in full on the day you may have to pay an additional daily storage fee until the balance is paid.