Buying car - first time in 30 years

hildasmuriel

My husband has been lucky enough to have had a company car for the last 30 years but he is retiring next month. Guess what - the company want their car back (cheek!).

He wants to buy a new car but as he has been out of the loop for so long, he wants to get a feel for how things are now. Remember, the last time he bought a car the internet was a baby and mobile phones were an expensive work tool. He used to look in the paper, drive round places and kick tyres etc etc.

We heard of people having 2 years delay in getting their new car - is that still happening or was it just a COVID thing?

Is demand more than supply or does the purchaser have any bargaining power now?

Do people still haggle or are they paying the list price?

Is it better to pay cash and should you expect a discount if you do?

Any other bits of advice for someone who feels like a newbie to car buying?

TIA

CliveOfIndia

There's still a delay in most new cars being built/delivered, perhaps slightly less so than at the height of Covid.  But yes, if you're buying new, you can expect to have to wait a while.

Buyers always have some bargaining power, but since supply is struggling to keep up with demand at the moment, there's less wiggle-room than there used to be.

And there's less room for haggling with most dealers - especially on used cars.  Since the internet makes searching for a car so easy these days, most dealers tend to list the car at pretty much the price they're willing to accept.  If they advertise it at a higher price, with the expectation of knocking some off later, then most people won't even bother to come and look at it, as it's so easy to trawl the internet and compare prices.

Paying cash is still an option, but again, don't expect too much in the way of a discount.  Apart from anything else, dealers get a commission for selling you a finance package, so it's in their interest to do so.

If you do have the cash available, then what some people do is take out the dealer's finance, make some money in the form of the dealer's contribution (they pay a bit of the cost for you, to tempt you into taking the finance), then pay the finance off after a month.  That way you can effectively get a discount off the car, and it only costs you a very small amount of interest.

Car_54

I've been in the same position, albeit a few years ago. To answer your questions:
 
- Delays - yes, but better to buy 'nearly new' from a franchised dealer. A 6-month-old car will still have at least 2.5 years' manufacturer warranty. 
- Bargaining power - very little or none
- Little or no movement on list price. Usually some scope for haggling on trade-in price, but that doesn't help your husband
- No discount for cash. Best deal is usually to take finance, which you can then pay off immediately at no extra cost

If he can get a letter from his employer confirming an accident-free record, many insurers will offer a substantial discount.

Grumpy_chap

There are delays for some new cars.  There are also models available from stock.  

There are also some cars where there is potential to negotiate on the price paid and / or incentives that soften the financial pain of the purchase.  

Both the shorter lead time and the better discounts are more easily available if showing some flexibility on the model and exact trim options.  It can be even as small as accepting the colour that is in ample supply.

The "supply chain challenges, long delays, no discounts" is in part true but also suits the car industry to promote and maintain belief in that mantra for as long as possible.

Use the online broker sites to get some insight as to where discounts might be and / or online car advertising sites with selecting either "new car deals" or set the filters to cars under 1 year and under 1k miles or similar.

daveyjp

With nothing to sell and looking for new go to the brokers. Carwow, drivethedeal etc.

 Far less hassle than hours spent listening to sales staff in shiny suits and shoes trying to maximise their bonus payments from selling extras you may not understand, want or need.

Goudy

Buying a new car, particularly if it's built to order could mean you have a rather large gap between the company car going back and the new car arriving.

If you have an idea what car you are after and aren't overly fussy on options, you would probably be better chasing down a new car in stock via one of the brokers mentioned above or ringing around dealers to see what they have available.


As for paying for it, yes times have changed and cash isn't always king anymore.
Finance tends to attract incentives for both the dealer and customer and you can use this to save some money.

Often HP or PCP deals offer "Deposit Contributions", this is the manufacturer/finance company paying a slice off the finance arrangement in the hope they make it back with interest payments.
It's neat way to discount a deal without reducing the overall invoice price.
A straight money off discount on the invoice tends to negatively reflect in the used prices later.

You are free to cancel finance before or pay it off anytime after you have taken delivery.
If you cancel before you may lose the contribution, but if you pay off (settle) the finance after delivery they can only charge you around two months interest by law. Peanuts compared to a deposit contribution of a couple of thousand.

It's easy to do, most finance companies have online portals or just phone them up and ask for a settlement figure.

Lots of people do it, I've done it myself a few times.
We're lucky enough to qualify for some NHS schemes that tend to offer bigger contributions but with slightly higher interest rates, but the interest rate doesn't really matter.

If you go down this route you don't really need to worry too much about interest rate as you will only pay a maximum of two months if you settle in the first month. So look for the larger contributions on cars (though those generally have higher interest rates on them anyway).

mgfvvc

daveyjp said:

With nothing to sell and looking for new go to the brokers. Carwow, drivethedeal etc.

This, definitely. My mother in law bought a Honda Jazz a couple of years ago. The local dealer wouldn't offer any kind of discount, it was "list price only" until I got her some quotes from Carwow. They then matched the Carwow quote.

hildasmuriel

Thanks all - all really useful bits of advice.

We hadn't considered doing finance, but of course it makes sense if you get a bigger discount than a month or two interest would cost. 

Seems that buying from stock would be the way to go also, rather than being picky about exact colour and trim.  

And check brokers   

Company have provided his insurance record. Now, if only he hadn't had that at-fault prang a few months ago.....  

HillStreetBlues

CliveOfIndia said:

And there's less room for haggling with most dealers - especially on used cars.  Since the internet makes searching for a car so easy these days, most dealers tend to list the car at pretty much the price they're willing to accept. 

For me personally I think it's a great step forward.
In the past you might go to see a car out of your price range, with the hope of getting it into that range, when you fail it's disappointing.
Now you can tell without going though all that palaver.

Stateofart

We heard of people having 2 years delay in getting their new car - is that still happening or was it just a COVID thing?

Is demand more than supply or does the purchaser have any bargaining power now?

Do people still haggle or are they paying the list price?

Is it better to pay cash and should you expect a discount if you do?

Any other bits of advice for someone who feels like a newbie to car buying?

TIA

Yes - my mate wanted an electric MG and waited 18 months.  Gave up in the end.

In my experience, dealers aren't budging at all.  If you don't buy, someone will, over the phone tomorrow.

They probably won't allow you to pay cash - if you mean buy outright then no, it's actually worse for the dealers to allow you buy outright as they can't sell you any financial products.

Advice - look at the paint for scuffs, make sure it's got the full service if you are buying a warranty.  If they offer a warranty at a cheap price (say £700 for three years) bite their hand off.

Clive_Woody

hildasmuriel said:

My husband has been lucky enough to have had a company car for the last 30 years but he is retiring next month. Guess what - the company want their car back (cheek!).

It was many years ago, but my dad was in a similar situation when he retired and he was able to purchase his company car at a very decent price. He knew the car's history and was very happy with it's condition. Might be worth asking.