Buying a car
Buying a new car can be a daunting experience. Whether it’s your first time or you’re just looking for an upgrade, knowing what to look out for when searching for your new vehicle is vital if you want to avoid disappointment.
In This Guide:
- What to look out for when buying a new car
- Should I get drive away insurance?
- Do I need to change/cancel my existing insurance policy?
What to look out for when buying a new car
What car are you looking for?
If you’re starting a family or it’s growing, you may benefit from a larger SUV or family saloon; whereas city drivers may prefer a smaller hatchback with low running costs.
Being mindful of your car and its purpose can help prevent disappointment or a wasted investment.
Buying new versus second hand
There are pros and cons attached to either buying new or second-hand cars. Knowing what you are in the market for and what is a good deal could save you thousands.
How will you pay for it?
If you plan on using finance to pay for a new car, it is important to know what is a good deal and how interest can affect your overall investment.
Depending on your driving habits, you may find different benefits between petrol, diesel or electric/hybrid engine types. Making the right choice on fuel type can make a significant difference to your annual running costs. Find out more with our guide on petrol versus diesel engines.
Car Tax (VED)
When selling an old car or purchasing a new one, it’s important to note that the car tax (VED) will no longer be transferred over. If selling an old car, contact the DVLA and send the relevant section of the V5C to notify a change of ownership.
New cars can be registered for car tax by filling out the online form on the DVLA website or calling them on 0300 123 4321.
It is common knowledge that new cars depreciate in value as soon as they are taken off the lot. This depreciation is taken into account by insurers, meaning that if you’re involved in an accident they may only insure for the current value of the vehicle.
GAP insurance is designed to cover the depreciation cost so you won’t have to pay out of your own money should something happen.
Should I get drive away insurance?
If you’re buying a new car from a dealership, it’s more than likely you’ll need to get drive away insurance to take it home.
Drive away insurance is designed to cover your vehicle temporarily until you find a more permanent, comprehensive insurance plan. Being insured is a legal requirement for taking your car on the road, so this flexible, short-term cover is ideal for giving you time to find the right plan while still being able to enjoy your new car.
Drive away insurance can cover you for as little as a few hours and up to 28 days and will offer the same range of cover and options as regular car insurance policies.
It is quick and easy to get a quote online and the paperwork will often be emailed to you there and then, so you don’t have to plan too far ahead.
Do I need to change/cancel my existing insurance policy?
When selling your old car, or part-exchanging it for a new model, you will need to inform your insurer. You can then either renew your current policy onto the new car or cancel your policy all together and get a new one.
Carrying your existing policy over will incur an admin fee of around £25 (depending on your insurer) and may end up with higher premiums depending on your insurers assessment of your new car.
Cancelling your policy can end up being cheaper, if you time it right. If you cancel during the term of your contract, you will likely have to pay a cancelation fee which will be offset by a refund for the total amount remaining on your policy (if paid annually). You will also lose your no claims bonus for that year, so it may be worth waiting until your policy is at its end before buying a new car.