Car Ownership Costs

Most motorists are pretty clued up when it comes to securing a good deal on their new car. Whether buying a new or used model, UK buyers have come to realise that there is almost always room to manoeuvre on the sticker price. The internet has been invaluable here. There are now many sites that will give you not just a recommended retail price for a new car, but also a ‘target’ price or price range that the average buyer could expect to achieve. Clearly, this varies substantially from manufacturer to manufacturer and also from model to model. It can also vary according to the time of year when you buy the car. Put simply, if you choose to buy your new car when the new registrations are coming out and cars are flying off the dealer’s forecourt, he is going to be less likely to offer you a discount. Remember too that car loans vary widely in their interest rates and costs, so if you are buying a car with a loan, these should also be taken into consideration to prevent a good deal becoming a poor one with an uncompetitive loan deal. Secured loans, where the amount lent is secured against a home or other asset, are often cheaper due to the reduced risk to the lender.

When buying a used car, you needn’t worry about the new registration period, and it might even be advantageous to buy at this time as dealers rush to clear out their trade-in stock. With used cars, too, there are many sources that will give you a target price range, based on a certain mileage and condition. Armed with this information, potential purchasers need not even negotiate hard. They simply need to let the seller know that they are aware of what the market price is and the seller will usually alter the price to suit.

Getting the best deal on a car, whether used or new, however, actually starts before the purchaser arrives on the forecourt. The canny motorist will research their proposed new car to ascertain not just the purchase price, but the running costs as well. These running costs can easily outweigh the purchase price of the car. Some of these running costs are simple to define. For example, cars are banded into insurance groups that will cost different amounts to insure. The lower the group number, the less the car will cost to insure. Road tax, or vehicle excise duty (VED), is similarly easy to calculate. Cars are banded according to their CO2 emissions for newer cars and engine size for older cars. For newer cars, the least-polluting cars attract no VED at all. Most cars will also have easily accessible details on fuel consumption, so it should be a fairly simple matter to estimate ongoing fuel costs. It should be remembered, however, that older models will rarely achieve the official figures.

Some other running costs may be less simple to pin down, but it is often possible to make a good estimate. The cost of servicing and maintenance is one such element. It may not be possible to exactly measure the costs but, again, there are helpful sites that will give you an average price for a service. They will also list the cars according to reliability, allowing an educated estimate to be made about these running costs.

One area that is often overlooked is that of depreciation. This is especially relevant with new cars, as most depreciation occurs in the first few years of a car’s life. Depreciation is simply the difference in a car’s value between the purchase price and the selling price. This can vary greatly between marques and also between models, so it is absolutely vital to research your particular model. For some cars, this will be the single biggest cost of motoring.

By following these few simple steps, the motorist can be sure of achieving the best possible deal on their car, both in terms of purchase price and running costs.