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Car Buying - Ed's journal
Car Buying
I'm doing this at the moment. I'll update as I find/realise more stuff.

How to buy yourself a (second hand) car.

Step 1: Get a copy of Auto Trader and Parkers Guide
Between 'em, about a fiver worth of magazines, but invaluable for the 'solid intel'. Have a flick through if you're not quite sure what you're after.

Step 2: Figure out how much buying power you have.

Sources of cash:
Bank loans. Got to bank and ask. These days they will often give an on the spot decision. Then go to somewhere else, e.g. sainsburies or tescos, and ask for a better rate, for a similar amount - they use the same ish credit criteria, and will often have better rates. Banks can often give you money immediately, other sources might take days to do so.

Savings. If you have that rainy day fund. Not always better than a loan, but generally. Interest rate on savings is pretty much always lower than interest on loan, however if you wipe out your savings, you don't have any anymore.

Trade in. If you have a car already, some places will accept part-exchange. Now, this is the new bit that I'm just learning. What you need to fish out first is: Your V5. Your Service book. Check in Parkers for 'expected' value of your car.

Finance exists, but is generally not very favourable. Plus side is it's fast - it's geared up to getting you to take away a vehicle on your first showroom visit. Downside is you'll often end up with a bigger interest rate.

Step 3: Figure out what you want.

If you know already, then great. Otherwise, it's decision time. What's important to you in a vehicle:

Passenger Space - a 'super mini' car will often be 'cozy' for people in the back seat. Some may just be totally infeasible.
Load capacity - related to passenger space - most cars have fold down seats, however if you need 5 passengers and a literal ton of kit, then you'll need something bigger. Mostly it's an either/or situation, unless you're taking an estate or pickup.

Engine - Don't care is a valid option. However, you may want to consider if you want petrol or diesel. The former is generally 'more zoomy' the latter better for fuel economy. Most models have variable engine sizes. Precise range depends on model, but there's generally a small, medium and large 'engine option' (e.g. a focus you can get 1.6, 1.8 or 2.0 petrol). Second hand price isn't necessarily altered much, but performance and fuel economy are going to be directly related.

Colour - Red Wunz Go Faster. 'don't care' is an option, but some prefer certain colour options. White and Black show up dirt pretty well. As does any strong colour really. Silver is popular for this reason. Colour also has a notable effect on resale/second hand value - purple doesn't resell well :). Respraying may be a theoretical option, but just forget it. A full respray is time consuming and expensive :).

Features - there's some stuff that are 'must haves', others that 'are nice' and still more which are 'don't cares':

Sun Roof
Air Conditioning.
Car Stereo (CD player)
Electric Windows
Central Locking
Immobiliser - (Affects insurance premium)
Alarm - (ditto)
Trim - Are leather seats a must have.
'Smoker options'. (Most cars have 'lighter sockets' not all that many actually have lighters these days)
Electric Wing Mirrors
Heated from windscreen (back almost always is)
Inbuilt satnav
Alloy wheels (yaah blinG! Generally better for your fuel economy and performance though, due to a lower unsprung weight. Also expensive to replace should you kerb them)

Step 4:
Find a vehicle that fits your criteria. Auto Trader is a good source.

'Main' dealers, Used Approved are more expensive, but tend to include more in terms of warranty/guarantee. Often vehicles will have been MOTed and Serviced as part of the deal.

'unmain' dealers are cheaper, but a little less concerned about it breaking down in 2 months time. They do still have the usual liabilities, and are generally fairly good about fixing anything you notice.

'private' sale is the most risky. Generally, cars privately sold are cheaper - after all, there's no dealer commission. And often they're as good as the cars you'd get off a dealer - Although a bit more likely to need a 'little bit of work', e.g. new sparks or whatever, maybe a service.
Technically a private seller has the same limitations as a dealer with regards to fitness for purpose etc. but actually pinning it on them should the car throw a piston in the first week might well be a _lot_ harder.

Step 5 Check Gotchas
Check tax. Don't assume you'll be driving it away with tax disk. They run out, if they've been on the forecourt for long, and they're still worth handing back in at the post office to get a rebate.

MOT on the vehicle you're looking at. When does it expire/next due.

Insurance: Check the insurance group of this motor before you buy it. There's a few that are 'surprise' in their insurance category, due to their relative nickability, or 'average driver profile'. E.g. a red fiesta is infeasibly high on the insurance category, due to 'boy racer syndrome'. And older car may well be too, due to being easier to steal.
Check you insurance company will transfer your insurance. They generally will, but expect to pay extra, unless you're seriously downgrading your car.

Service history: When's the next service. Has it been serviced 'about' on what the intervals suggest? A few hundred miles here and there isn't an issue, but if there's a large gap then that's not a good sign. Old oil increases wear on the vehicle. Of course, it could also be because they forgot to get the book stamped, but either way it's still a good excuse to drop a bit off the price.
What'll you be needing to 'do' soon. Most cars have a 'recommended replacement' schedule, of things like timing belts on engines.

Keys - Cars with engine computers and immobilisers also tend to have expensive keys. And expensive keys that are 'coded' to the car. Check you've got the bits you need to add a new one, otherwise it stops being expensive, and starts getting _very_ expensive. E.g. Fiat Puntos have a 'master' key. Fords need 2 keys to rekey another. Chances are if you only have one key, this will cost you some in the not too distant future. Also remote keys tend to be pricey too. A ford 'remote lock/unlock' key will cost about £80. Normal keys are about £20. And if you don't have enough keys to recode, they'll charge about £100 to recode your engine computer. (Fiat require you to replace your ECU if you don't have a master key any more, which is about a £400 bill)

Previous owner (if they smoked/had stinky dogs don't expect this smell to ever go away)

Tread remaining - full set of new tyres, especially premiums will give pain. Don't forget to have a look at the spare. Not a problem overly, but count this into the 'cost' of buying this vehicle.

Scuffs and scratches - Not very significant, but irritatingly expensive to get 'sorted' professionaly. A 'touch up kit' is a few quid, but a 'professional' respray/relaquer goes for about £100 per panel. Of course, leaving scuffs and scrapes as are is quite acceptable, although be _very_ wary if they go as far as bare metal - that means rust, and that's the ultimate deathknell of a car. Colour matching, especially on older models can also be a bitch.

HPI check. RAC, AA or HPI will check the car's history for you. RAC and AA will also do car inspections, which is very strongly recommended if you don't know your cars inside out. Even if you do, run an HPI to check for outstanding finance, stolen vehicle, or mysterious changes in milage or VIN. (Vehicle Identification Number). If you car is nicked or still on finance, then it can just be reclaimed, legally, leaving you in the lurch. If it's been messed with that probably makes it a bad idea. All sorts of reasons someone might do this, and pretty much none of them legit. RAC or AA checking takes a little longer, but most dealers won't mind. You do risk 'em selling the car in the meantime if you don't 'secure' it, but don't let 'em pressure you into it.

Step 6:
Set a price.
Ignore that sticker price, that's a guideline. It's virtually guaranteed with a dealer they're expecting to sell it for less. Private sale, its a bit more variable, but again similar situations apply.
Start off by offering them a useful wedge underneath that price, just to see what their reaction is. (e.g. call it 2grand less, and I'll take it). They'll probably look all shockhorror, as if they'd be cutting their own throats, but then will make a counter offer.

THEY WILL PLAY YOU if they have a chance. Things like 'calling the boss to check' are a common ploy. They don't need to do that, and probably don't even phone 'em, but need to give some show that they are 'doing their best' for you. This is a sham. They 'playing the go between between the boss and the customer' is trying to set you up as seeing them as your ally. And so when they 'do the best they can'

I'll not go into 'how to do sales' but there's basically a technique to it, that involves first building rapport, then pitching to you the benefits. I can't find my notes, but there's also a lot of techniques to 'closing' the deal, and setting a price. Remember, they are on commission. They want to sell you this. They also want to sell you for a higher price, so they get more commission.
This does give you an opportunity to 'counter sell' - build the rapport, get them thinking about the benefits that the commission might bring, and then they'll have to decide how much they want that commission. Just bear in mind, they're almost certainly better at it than you :)

Suggestions for counterploys:
Cash price, vs finance - their price might assume 0% finance for 2 years. If you don't need it, it's cheaper.

Work needs doing - spot stuff you'll need to sort out yourself. Knock off over the odds for it. They may offer to sort if for you, otherwise you've dropped the price a bit.

Extras - if there's another car with the options you want, they might be amenable to your 'swapping' for similar cash. Or maybe they'll throw in some added extras to finish the deal.

Gotchas - well, if you're going to have to buy new tyres, it's only fair they should drop the price. Ditto tax disks.

Trade in - often a lot of scope to negotiate here. They probably don't care about your old car, but ... well basically if they can't move further on the sticker price, then maybe they
can move further on the trade in price. In fact, they almost certainly can. Compare to parkers, the trade in price and the 'sticker price'. Expect to pay 'about' the difference between the two. (Parkers may say 7000 price, and a 3000 trade in. If your dealer sells it for 9000, but gives you 5000 trade in, then you shouldn't really be worrying).

'limit your funds'. Start with 'having available' less than you need to buy it. 'I could maybe afford another 500, but if it's 1000 then ... naah, I'm sorry, I can't stretch that far'. NEVER EVER tell the salesdroid how big a loan you got. I can guarantee they'll find you something that's a 'perfect fit' within the trade in they offered you, and about 10 quid less than how much cash you have. Perhaps suggest you need to go and apply for a loan, but can afford x per month. Find an online calculator, and check what that means in raw price. Again, don't ever say how much you can actually afford. A little more risky, as they may suggest a longer loan term, but don't bite.

3 years on a carloan is about the right amount, maybe stretch to 4 if you absolutely must, but any more and your odds of 'having an issue' before it's repaid start to increase.

If you spot one you want, then you can outline your 'must have' criteria, and then outline an amount you're prepared to pay. If you assume the 'parkers price' on trade in + cost, then drop it down a bit, then let 'em push you back up to the place where it's 'about right' then you should be good. Then they may lead you into suggesting exactly the car you want, at the price you're prepared to pay.

They may also be able to outline the stellar alternatives of this other car that's a lot cheaper. This may actually be an option, however dealers aren't stupid - it'll be cheaper for a reason. Often this will be as simple as more miles or older vehicle, maybe a few less 'options'. Although bear in mind, this will be marked up again, so you get to negotiate down again. If he's already given ground on the trade in, don't let 'em retake it. For this reason it's sometimes a better idea to start looking for the 'ideal case' but with your eye on the 'fallback position' - negotiate on the ideal case, since they've probably got a percentage margin, you can get another chunk on your trade in, then apply the trade in against the fallback.

Be prepared to walk. At the end of the day, you do not have to buy this car, from this person. If you really can't get that car for a price you're prepared to pay, then move on. You can use this as your final bluff, but it might mean you're passing up that one. Be prepared to do this. Sometimes they'll offer you a 'last minute' oh ok, maybe as it's you... Other times you won't. There are more fish in the sea.

Remember. This car dealer is not your friend. They will be nice to you, and charming and everything, but this doesn't mean anything more than them wanting commission from you.
4 comments or Leave a comment
From: lostdreamer666 Date: October 23rd, 2006 11:44 am (UTC) (Link)
We can probably scrounge up a dent puller, and you will be surprised what T-Cut and elbow grease can do.
If you want a cheap car to use as a part-exchange haggling point, I know scrappy who should be able to round up something with a ticket for not very much(tm)
ehrine From: ehrine Date: October 23rd, 2006 01:49 pm (UTC) (Link)
For reference on the Master Key thing with Fiat, that system was dropped about 5 years ago as it was a pain in the arse. Fiat now tend to use the two key system that Ford does. A bit of research online on the make/model/age of a care should enable you to find out the system used on any particular car.
sobrique From: sobrique Date: October 23rd, 2006 01:52 pm (UTC) (Link)
It's a fair point, but you've still got to watch out that they hand you more than one key ;)
From: portilis Date: October 23rd, 2006 01:58 pm (UTC) (Link)
Nice post, but lj cut!

4 comments or Leave a comment