September 1st, marks the release of the new ë64í number plate and car suppliers will hope that accompanying it will be an influx of eager buyers, bucking the conservative trend on consumer spending, and splurging on a new set of wheels.
Purchasing a new car is notorious in its costliness, and with valid reason, with data from the AA indicating a newly bought vehicle loses roughly a third of its value the moment it is driven away from the showroom.
However, fresh data has served to challenge this perspective, as a new car could prove to be a worthy long term invest. Certainly, the initial outlay could be burdensome on many householdís finances; however reduced maintenance & functioning costs combined with more affordable insurance deals could lead to motorists saving more money on a new car than a second hand one.
The study from a reputable online financial service based their assertion on a survey conducted on five popular cars including the Ford Fiesta, Vauxhall Astra and Volkswagen Golf. The newest versions of all 5 were compared with the same models released in 2009, and the results make easy reading for those prospectively new car-buyers sitting on the fence.
All 5 newer models had cheaper maintenance & functioning costs, with MOT, road tax and even petrol prices recorded as being more affordable than in their predecessorís cases. The new VW Golf proved to be the best value for money, yielding a £422 saving on the older model. Moreover, all 5 newer models were cheaper to insure than their passÈ counterparts.
As such, although how swiftly a new car now depreciates in value cannot be refuted, a significant proportion of this lost value can made up through money saved on running costs, potentially saving struggling families money in the long term.
Drive down your Insurance Deal
With the introduction of the new registration plates, and the added impetus these place on buyers to purchase new cars, September is undoubtedly an especially influential month for motorists across Britain. Given the culture of change which takes hold of drivers in September, it is natural to understand the concurrently swelling number of car insurance renewals.
However, it is the nature of these renewals that can be called into question, with millions of drivers having their finances strangled due to their apathy in comparing insurers. In permitting their insurance providers to continue rolling their policy over, a vast number of consumers are missing out on better deals elsewhere.
Loyalty does not necessitate better deals in this industry, and so many motorists are being subjected to uncompetitive prices and remain none the wiser. It has been reported that drivers in Britain could be collectively over-paying on insurance deals by an estimated £1.9bn a year.
All drivers are strongly encouraged to browse the market, assessing their current deal against the plethora of ones currently on offer, and ensuring they are not being scuppered by squeezing lenders.
How to Fund a New Car Purchase
So, although there is data to suggest that a new car could be more economical to run than an older model, the problem of affording one in the first place remains. In an economy teetering on a tightrope between growth and recession, a new car is not the first product on the thrifty saversí lip, and with good reason. Consumers have no choice but to be guarded in an age of spiralling house prices, bills and prolonged stagnation of wage growth.
However, there are an abundance of tempting measures potential car-buyers can undertake in order to finance their purchase.
A consumer can take out a Personal Contract Purchase (PCP). A PCP enables a purchaser to drive their vehicle of choice for the duration of time agreed upon, providing they make timed payments over a specified period usually in between 24 ñ 48 months. The vehicle in question remains the property of the supplier until the end of the lease, upon which the consumer is given the choice of whether they want to purchase the car for a price calculated by the supplier.
Credit Cards are a viable way of securing a short-term manageable loan, and consumers ought to mull over the array of long term interest-free (especially on purchases) credit cards on the market. For example Tescos offers a 19 month interest free clubcard credit card, whereby customers can obtain cluibcard points at Tescos branches and elsewhere. However, when using credit cards, it is important to adhere to a regimented repayment schedule, otherwise you will find yourself wallowing in a cesspool of debt with no lifejacket.
There are various other methods of tackling inflated prices for new vehicles, however paying in cash enables you to negotiate from a position of strength, according to David Black, finance specialist at market analyst, Consumer Intelligence:
ìCash is king and may mean you can negotiate a lower price, of additional extrasî
ìEqually, if you have a top-notch credit rating, there are some competitive personal loans available. On borrowing between £7500 and £15000, Sainsburyís Bank, M&S Bank and Tesco Bank are all offering a rate of just 4.1%î: he added.
Having spoken at length of a potential boom in new car purchases, it must not be forgotten that this should organically produce an influx of second hand cars on the market, as those indulging in fresh sets of wheels will be shelving with a view to selling their second hand motors.
As such, bargains ought to be flying around thick and thin, however consumers are urged to be vigilant regarding used cars which could have unlawful stigma attached to them. All prospective customers are encouraged to conduct HPI checks at www.hpicheck.com on their cars of choice to ascertain whether their intended purchase could be riddled with corruption.
With new sanctions being imposed by the DVLA from October 1st, the current climate is one of uncertainty for motorists, and all should strive not to find themselves on the wrong end of a fine they did not know could be slapped upon them. Be diligent in both your car purchases, new or old, and your approach to the new DVLA rulings set to be implemented on October 1st.
Otherwise, drive safe!