Securing the best deal on a nearly new car
Ex-rental, pre-registered and demo models all offer massive discounts and will save you thousands
Published 01/12/2015 | 02:30
While many new car buyers may relish the idea of a 161 registration plate, for those who are prepared to settle for a 151 or 152, the savings can be significant.
Often buying an ex-rental, pre-registered or demo model can be the very best way to get a great deal on a new or nearly new car.
Buying a rental car may sound like a recipe for disaster, but it can in fact prove a very cost-effective way to own a nearly new car. Car-rental companies offer plenty of choice to would-be buyers and you will find most makes and model represented when you go to hire a car. By the same token, when they come to sell these on, there is a good range available.
But what sort of condition is a hire car likely to be in?
The fear of being charged extra when you return the car usually means that rental cars are well looked after. There is nothing like a threat of having to pay for any damage to focus the mind and slow you down behind the wheel.
In terms of price, you manage to avoid the first year's deprecation, so you can expect to pay somewhere between the price of a nearly new demonstration model and a one-year-old vehicle.
The real issue with rental cars is the mileage and you need to weigh up the cost saving versus the mileage. If your annual mileage is low, then buying a car with high mileage may not be an issue as over time it will balance out.
Buying a pre-registered car can also save you some money.
These are cars that have been registered by either the car distributor or dealer. They are effectively selling these cars to themselves in order to meet sales targets set by manufacturers.
Not only are there significant discounts on these 'nearly new' cars but they can be driven off the forecourt instantly, unlike a new car, where generally buyers will have to wait a couple of months for delivery.
On the downside, you will have no choice on colour and trim and you may not be able to specify the exact engine option that you want. Also, a pre-registered vehicle is technically a used car and this could affect the resale value.
In terms of the warranty, it is worth noting that it begins when the car was first registered, so you should check what is left on it.
Also, when it comes to finance, you may not have as much choice, as often the best deals are reserved for brand new cars to make them more attractive.
Demo cars are also an option, but they are likely to have more kilometres on the clock than a lot of other pre-registered cars, so the price you pay should reflect this.
Apart from demo models, there are also savings to be made when manufacturers are replacing a car.
Opel has just launched a brand-new Astra, Hyundai has the new Tucson; while Kia's new Sportage will be in showrooms very soon and Volkswagen's new Touran is due here next month.
Anyone in the market for these models should have even more room for manoeuvre.
Car manufacturers are also offering huge discounts to attract buyers into their showrooms. From fuel vouchers to free servicing, it's enough to make the end of the year a truly festive season for new car buyers, so check out some of the 161 deals and special offers on page 3.
Before your thoughts switch to Christmas, mistletoe and mulled wine, if you're in the market for a car, this is the best time to get a deal, as showrooms are crammed with nearly new vehicles with low mileage, some being offered at substantial discounts.
Take a trip to your local dealers and shop around - you might be pleasantly surprised at what deals they can do for you.
Remember to draw up a short list of likely cars and above all, drive as many as possible. Some cars hold up better over time than others ,so do your research.
Always negotiate the total price, rather than a monthly repayment. Often, monthly or weekly repayments can conceal an expensive deal. You'll need to factor in running costs, insurance cover, warranties and breakdown cover - so don't overstretch yourself and ask the dealer about any hidden fees or costs.
Don't be afraid to haggle before making any car purchase and if you can't secure a discount then don't under-estimate the value of some free optional extras instead.
Always give the impression that you are still undecided.
Find a similar car and price to the car you are interested in and tell the dealer you will be checking out the price and extras offered on that one at another dealership nearby.
And remember there are plenty of cars to choose from, so this is not the time to get emotionally attached.
What you need to know about your car's residual value
Residual value is one of the most important factors to consider when buying a car and one of the most overlooked. While all cars depreciate, some lose much less value than others.
Motorcheck.ie recently analysed a cross-section of used 3-, 5- and 10-year-old car prices in various segments from 2010 to 2015 and found that in all cases the price for these cars in 2015 had risen sharply from the prices charged in 2010.
On average, it costs about 18pc more for a three-year-old car today than it did in 2010. This is most likely due to two factors: the shortage of stock has meant that used car prices are higher and the recovery in the economy means buyers can access cash more readily, either through their own means or by raising finance, so there is now more cash chasing a limited supply of used cars, which in turn pushes up prices.
So while cars today are retaining their value better than they were in the past, there are still factors you need to be aware of that affect resale values.
Brand: The brand you buy has a significant impact on the resale value and historically some brands and models simply hold their value better than others.
Paint colour: The most common colours found on Irish roads are silver, black and grey, so it is always safer to stick with one of these in terms of resale value.
Sunset Orange Metallic may be easily spotted in the supermarket car park, but it may be a difficult one to sell on.
Technology: In-car technology changes rapidly, so cutting-edge and expensive today may not add anything to the resale value by the time you go to sell it on.
Exterior condition: A regular polish and wax will make a huge difference to your paintwork.
Interior condition: To get the best price, it is vital to make sure that the interior is as spotless as the paintwork on the outside. Clean the seats, vacuum the carpet and polish the dashboard.
Mechanical condition: Service records are always valuable and the more guesswork you can take out of a car's history, the higher the resale value.